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Another week, and another round of crazy cash injections and valuations emerged from the AI realm.

DeepL, an AI language translation startup, raised $300 million on a $2 billion valuation; Scale AI, a data-labeling platform for machine learning models, secured $1 billion as its valuation nearly doubled to $13.8 billion; and H, a fledgling French startup working on its own frontier models, raised an eye-watering $220 million seed round at an undisclosed valuation (though it surely takes H comfortably into unicorn territory).

While all the usual institutional investors are present, such as Accel, Index, and Y Combinator (YC), these investments really underscore the corporate clamber to get in on the 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 inception in 2016 through its Series E round in 2021. Similar investors returned for the Series F, but also in tow were Meta, Amazon, Nvidia, and the VC arms of Intel, AMD, Cisco, and ServiceNow.

On the same day as Scale AI announced its chunky Series F investors, H showed its hand: Amazon had bought in too, alongside Samsung’s VC arm and UiPath, an automation software company worth $10 billion today.

Corporate investment in AI startups has been a big story in the last couple years, best exemplified by Microsoft’s close affinity with ChatGPT-maker OpenAI. That deal has attracted scrutiny from antitrust regulators in the European Union and the U.K., drawn by growing concerns that Big Tech is adopting a new “quasi-merger” tactic that seeks control and influence over nascent technologies without buying them outright — this might be through hiring founding startup teams, for instance, or though strategic investments.

Microsoft is said to own a 49% stake in OpenAI, meaning there could well be a case to answer once European regulators have concluded their initial investigations — regardless of whether Microsoft has voting clout in OpenAI or not.

Anthropic could find itself in a similar position. The three-year-old company has raised north of $7 billion from numerous investors, with corporates such as Google, SAP, and the venture arms of Salesforce and Zoom throwing cash into the pot. But Amazon, specifically, is responsible for more than half of Anthropic’s fundraising to date, concluding a $4 billion investment in March. Even though its investment has not given Amazon a majority stake (similar to Microsoft with OpenAI), U.K. antitrust regulator the CMA last month confirmed it was looking at the deal to establish whether it might qualify for an antitrust investigation.

At the same time, the CMA also revealed it was looking into Microsoft’s recent acqui-hire 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 consumer AI unit, leaving a bare-bones Inflection AI focused on the enterprise segment.

The CMA also confirmed it was investigating Microsoft’s recent $16 million investment in French AI startup Mistral. But the regulator swiftly concluded that the deal didn’t qualify for investigation due to its relative size.

“The CMA has considered information submitted by Microsoft and Mistral AI, together with feedback 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 acquired material influence over Mistral AI as a result of the partnership and therefore does not qualify for investigation.”

While Nvidia hasn’t historically been shoehorned into the same “Big Tech” bracket as these aforementioned companies, it has emerged as one of the major players in the AI gold rush, and its clout can’t be overstated: the company was valued at a not-insignificant $770 billion this time last year, but this figure has ballooned to more than $2.5 trillion in the intervening months. This positions 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, alongside Amazon, Google, Qualcomm, Intel, and others. Elsewhere, Nvidia has bought stakes in Cohere, Perplexity AI, Inflection AI, Cohesity, Mistral AI, Weka, Wayve, and a host of other AI startups.

Big Tech is showing no sign of easing on its AI startup investment ethos, in the hope that procuring smaller equity stakes might just get them a regulatory pass. But that’s not to say that the juggernauts 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 manner of subtle and not-so-subtle ways.

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