Warren, Wyden, Blumenthal Call on Federal Regulators to Investigate Meta, Google, NVIDIA “Reverse Acqui-hire” Deals

Warren, Wyden, Blumenthal Call on Federal Regulators to Investigate Meta, Google, NVIDIA "Reverse Acqui-hire" Deals

In "de facto" mergers, Big Tech firms license technology, siphon top talent from smaller rivals

"If left unchecked, these types of arrangements between Big Tech companies and smaller AI developers…risk[] driving up prices and choking off innovation"

Text of Letter (PDF)

Washington, D.C. - In a new letter today, U.S. Senators Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee; Ron Wyden (D-Ore.), Ranking Member of the Senate Finance Committee; and Richard Blumenthal (D-Conn.), Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, urged the Federal Trade Commission (FTC) and the Department of Justice (DOJ) to enforce antitrust laws by investigating recent Big Tech "reverse acqui-hire" transactions, which, the senators warn, appear to be designed to evade antitrust scrutiny and risk further consolidating the Big Tech industry.

"The FTC and DOJ should not allow these companies to avoid the typical reviews that your agencies apply to acquisitions and mergers," said the senators.

In January 2026, FTC Chair Andrew Ferguson announced the agency would investigate Big Tech acquihires. The senators highlighted three recent "reverse acqui-hire" deals, which involved Big Tech firms hiring top talent from smaller competitors and acquiring minority stakes in those competitors or licensing their technology, stopping just short of a formal acquisition or merger.

In June 2025, Meta announced a deal with Scale AI, in which Meta hired Scale AI's CEO and acquired a large minority stake in the company, as part of its plan to start a new artificial intelligence (AI) research lab. Weeks after the deal was announced, Scale AI cut 200 full-time employees and ended work with 500 contractors, leading one investor to compare Scale AI to a "gutted fish."

In July 2025, Google struck a deal with Windsurf, a start-up that developed an AI coding assistant, poaching its two co-founders and licensing the company's technology. The deal also saw Windsurf's research and development team join Google as well. The remaining parts of the company were later acquired by Cognition AI.

In December 2025, NVIDIA announced a new $20 billion licensing deal for Groq's inference chip technology. As part of the deal, Groq's founder, president, and other staff will join NVIDIA. The senators noted that the deal allows NVIDIA, which already dominates the market for AI training chips, to expand its foothold in the market for AI inference chips.

"[These deals] function as de facto mergers, allowing the companies to consolidate talent, information, and resources, all while apparently attempting to bypass the scrutiny typically applied to mergers and acquisitions," wrote the senators.

The senators argued that these deals may present "significant competitive concerns" because of the market power they give to the Big Tech companies.

"If left unchecked, these types of arrangements between Big Tech companies and smaller AI developers will accelerate consolidation of the AI sector, which in turn risks driving up prices and choking off innovation," said the lawmakers.

"The FTC and DOJ have a responsibility to enforce the nation's antitrust laws in order to protect consumers, small businesses, and workers, and should not allow Big Tech to engage in acquisition strategies that are designed to limit competition in violation of federal law," wrote the senators.

The senators called on the two agencies to closely scrutinize Big Tech "reverse acqui-hire" deals and block or reverse the deals if they violate antitrust laws. Senators Warren and Wyden previously wrote to the FTC and DOJ under the Biden administration, urging them to crack down on anticompetitive behavior in the AI industry, including "reverse acqui-hires."

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