Another week, and another round of crazy cash infusions and valuations has emerged from the AI realm.
DeepLan artificial intelligence language translation startup, raised $300 million at a $2 billion valuation. AI scale, a data labeling platform for machine learning models, secured $1 billion as its valuation nearly doubled to $13.8 billion. and Ha fledgling French startup working on its own frontier models has raised an impressive $220 million round at an undisclosed valuation (though it certainly moves H comfortably into unicorn territory).
While all the usual institutional investors are present, such as Accel, Index and Y Combinator (YC), these investments really highlight the company’s climb to action while keeping regulators at arm’s length.
The quasi-merger
Take Scale AI, a company that had so far attracted purely institutional and angel investors from its founding in 2016 to its Series E round in 2021. Similar investors returned for Series F, but also in tow were Meta, Amazon, Nvidia and the VC Weapons of Intel, AMD, Cisco and ServiceNow.
On the same day that Scale AI announced its massive Series F investors, H showed its hand: Amazon had also bought, along with Samsung’s VC arm and UiPath, an automation software company valued at $10 billion today.
Corporate investment in AI startups has been a big story over the past couple of years, best exemplified by Microsoft’s close affinity with ChatGPT maker OpenAI. This deal has attracted scrutiny from antitrust regulators in the European Union and the UKdue to growing concerns that Big Tech is adopting a newquasi-mergerA tactic that seeks control and influence over nascent technologies without buying them outright — this can be through recruiting startup founding teams, for example, or through strategic investments.
Microsoft is said to own a 49% stake in OpenAI, meaning there could very well be an answer once European regulators complete their initial investigations — regardless of whether Microsoft has a vote on OpenAI or not.
Anthropic could find itself in a similar position. The three-year-old company has raised north of $7 billion from multiple investors, with the likes of Google, SAP and enterprise arms Salesforce and Zoom throwing cash into the pot. But Amazon, in particular, is responsible for more than half of Anthropic’s fundraising to date, completing a $4 billion investment in March. Although its investment did not give Amazon a majority stake (similar to Microsoft’s OpenAI), Britain’s antitrust regulator, the CMA, last month confirmed it was reviewing the deal to see if it could qualify for an investigation against monopolies.
At the same time, CMA also revealed that it was looking into Microsoft’s recent acquisition of Inflection AI (a year after Microsoft became Inflection’s biggest backer) which saw Microsoft scoop up its founders and key colleagues to run a new AI unit consumer, leaving a bare-bones Inflection AI focused on the business segment.
The CMA also confirmed it was investigating Microsoft’s recent $16 million investment in French artificial intelligence startup Mistral. But the regulator immediately concluded that the deal did not qualify for investigation because of its relative size.
“The CMA has considered the information submitted by Microsoft and Mistral AI, together with the comments received in response to its invitation to comment,” a CMA spokesperson said at the time. “Based on the evidence, the CMA does not believe that Microsoft has gained material influence over Mistral AI as a result of the collaboration and therefore does not qualify for an investigation.”
Although Nvidia has historically not been lumped into the same “Big Tech” category as these aforementioned companies, it has emerged as one of the major players in the artificial intelligence gold rush, and its influence cannot be overstated: the company was valued at a a paltry $770 billion this time last year, but that number has grown to more than $2.5 trillion in the intervening months. This places Nvidia as the third most valuable company globally, behind Microsoft ($3.17 trillion) and Apple ($2.87 trillion), but ahead of Meta ($1.18 trillion), Amazon ( $1.88 trillion) and Alphabet ($2.15 trillion).
Nvidia has invested in AI startup Hugging Face, along with Amazon, Google, Qualcomm, Intel and others. Elsewhere, Nvidia has bought stakes in Cohere, Perplexity AI, Inflection AI, CohesionMistral AI, Weka, Wayve and a host of other AI startups.
Big Tech shows no sign of relaxing its AI startup investment ethos, hoping that acquiring smaller stocks might just get them a regulatory pass. But that doesn’t mean the owners of Silicon Valley and Seattle won’t be able to exert some form of control over these companies — they are stakeholders, after all, and can influence startups in all kinds of subtle and not-so-subtle ways.
