214 | 🇺🇸 🤖 Trump's AI plans revealed

In today’s Brainyacts:

1. Grab the talent, not the company

2. Claude for quick summaries

3. OpenAI updates and other AI model news

4. Trump’s AI plans and more news you can use

   👋 to all subscribers!

To read previous editions, click here.

Lead Memo

👊 🧠 BigTech AI Talen Grab: Fair or Anticompetitive?

It’s no shock that the biggest names in tech seem to be on a hiring spree, particularly snatching up talent from AI startups? But how they are doing it is getting a hard look by government regulators on competition and antitrust issues.

Acquihires: The New M&A?

First things first: what's an acquihire? It's when a big company hires a bunch of employees from a smaller company, often including founders or key players, without actually buying the whole company. It's like saying, "We don't want your company, but we'd love to have your brains!"

The Valuation Dilemma

AI startups are hot property right now, with valuations that can make even seasoned investors do a double-take. For big tech companies eyeing these startups, the price of a full acquisition can be eye-watering. Enter the acquihire: a way to snag the talent without the full price tag.

The Appeal of Acquihires

1. Cost-Effective Talent Acquisition: By hiring key personnel instead of buying the whole company, tech giants can access top-tier AI talent without paying for inflated company valuations.

2. Reduced Financial Risk: High valuations often come with high expectations. Acquihires allow companies to bring in talent without the pressure of justifying a massive purchase price to shareholders.

3. Flexibility: Companies can cherry-pick the talent they need without inheriting an entire organizational structure or technology stack that might not fit their needs.

Regulators' Growing Interest

Acquihires are nothing new. But here's where things get interesting. Regulators, who typically scrutinize full-blown mergers and acquisitions, are now turning their attention to these talent grabs. Why? Because they're starting to see these moves as potential loopholes in antitrust regulations and competition policies.

FTC Takes a Closer Look

The Federal Trade Commission (FTC) in the U.S. is leading the charge. They've recently launched an informal inquiry into Amazon's deal with AI startup Adept. Amazon didn't buy Adept outright, but they did hire its co-founder and CEO, David Luan, along with other key team members. They also licensed Adept's technology. The FTC wants to know if this arrangement is just a clever way to sidestep the usual scrutiny that comes with a full acquisition.

Across the Pond: UK's CMA Joins In

It's not just the U.S. taking notice. The UK's Competition and Markets Authority (CMA) is also on the case. They've opened an investigation into Microsoft's hiring of talent from Inflection AI, including co-founder Mustafa Suleyman, who became CEO of Microsoft AI. The CMA is concerned that these moves could be reinforcing existing market power in the AI industry.

Why Regulators Are Worried

So, why are regulators sniffing around these hires? Here are a few reasons:

1. Market Concentration: When big tech companies snag top talent from innovative startups, it could lead to fewer players in the AI game. Less competition often means less innovation and potentially higher prices for consumers.

2. Power Dynamics: The CMA has pointed out an "interconnected web" of over 90 partnerships and investments involving the same firms in the AI industry. This concentration of talent and resources in a few hands could shape the future of AI in ways that benefit big tech more than the public.

3. Innovation Stifling: When startups lose their top talent to tech giants, it might hamper their ability to develop groundbreaking technologies that could challenge the status quo.

4. Regulatory Evasion: Some lawmakers, like Senator Ron Wyden, argue that these talent acquisitions are a way for big tech to grow their AI capabilities while flying under the regulatory radar.

Is It Fair Game or Foul Play?

The fairness of acquihires is a complex issue:

• Pro-Acquihire Argument: Supporters might argue that it's a market-driven solution. If startups are overvalued, why should big tech be forced to overpay? This approach allows for efficient allocation of talent.

• Anti-Acquihire Stance: Critics contend that this practice allows big tech to cherry-pick the best parts of potential competitors, effectively nipping competition in the bud without triggering regulatory scrutiny.

The Bottom Line

While acquihires in AI might be a rational response to inflated valuations, they're not without competitive concerns. The challenge for regulators is to balance:

1. Allowing efficient market operations and talent mobility

2. Preventing the concentration of AI capabilities in a few hands

3. Ensuring a competitive landscape that fosters innovation

As the AI field evolves, we might see regulators develop new frameworks to assess the competitive impact of these AI talent acquisitions, looking beyond just the dollar value of deals to consider their potential long-term effects on the AI ecosystem.

Spotlight

👷‍♂️👀 Use Claude to Distill Research Into Easy-to-Understand Presentation

I want to highlight another helpful and pragmatic way of using Anthropic’s Claude.

As a law faculty member and newsletter writer, I often read research papers. Some require deep dives, while others I just need quick summaries of for prioritization. Although summaries help, I wanted a more concise "CliffsNotes" version to manage my reading list better.

So, I used a simple prompt with Claude. I had a newly released PDF paper and needed to decide its importance quickly. I asked Claude to create an interactive presentation summarizing the key findings and evaluating the strengths and weaknesses of the arguments.

After uploading the PDF, Claude generated a basic six-slide presentation in under 30 seconds, providing a clear and concise overview. Though basic, it's a great starting point that can be improved upon. I highly recommend trying it out for efficient research management. I will play with this prompt and show you later on what I can do with it.

Here is my very simple prompt:

If you want to see the output of the presentation, CLICK HERE.

AI Model Notables

► OpenAI Enterprise is launching more tools to support enterprise customers with managing their compliance programs, enhancing data security, and securely scaling user access. 

These new features help ChatGPT Enterprise customers with:

• Compliance programs: Support meeting requirements for regulations like FINRA, HIPAA, and GDP 

• eDiscovery and legal holds: Preparing and maintaining data in the case of legal proceedings

• Data Loss Prevention (DLP): Monitoring and deleting sensitive data such as Personally Identifiable Information (PII), Protected Health Information (PHI), or financial data

► OpenAI just announced the launch of GPT-4o mini, a cost-efficient and compact version of its flagship GPT-4o model — aimed at expanding AI accessibility for developers and businesses.

► LexisNexis released a new AI tool, Nexis+, to research and analyze business, financial and legal information and news, extract relevant information from lengthy documents and summarize and share content. It can also create first drafts and outlines of intelligence reports and quickly come up with business insights.

► Ex-OpenAI and Tesla engineer Andrej Karpathy announces AI-native school Eureka Labs targeting higher education (so far).

► Apple, NVIDIA and Anthropic reportedly used YouTube transcripts without permission to train AI models

► Meta will withhold its next multimodal AI model — and future ones — from customers in the European Union because of what it says is a lack of clarity from regulators there.

News You Can Use:

➭ A group that includes Trump allies has reportedly drafted blueprints for a new AI executive order that an incoming Trump administration could use. It would dismantle Biden-era regulations and promote "Manhattan Projects" for military AI applications.

➭ Here’s how AI is changing NASA’s Mars Rover science.

➭ Ukraine rushes to create AI-enabled war drones.

➭ Netflix Co-CEO Ted Sarandos says AI will "generate a great set of creator tools."

Who is the author, Josh Kubicki?

Some of you know me. Others do not. Here is a short intro. I am a lawyer, entrepreneur, and teacher. I have transformed legal practices and built multi-million dollar businesses. Not a theorist, I am an applied researcher and former Chief Strategy Officer, recognized by Fast Company and Bloomberg Law for my unique work. Through this newsletter, I offer you pragmatic insights into leveraging AI to inform and improve your daily life in legal services.