Google spent $2.1 billion to ‘rehire’ top AI engineer who quit Alphabet in frustration in 2021

Google has made a bold and pricey decision, spending an eye-watering $2.7 billion to bring back a former employee who left in frustration just a few years ago. Noam Shazeer, a top AI engineer, has returned to the tech giant through a somewhat sneaky process called ‘reverse acqui-hire.’ But why the hefty price tag, that too for one person?

Well, it’s not just about the money – it’s about what this deal means for the future of AI and the competition in the industry.

At a time when tech layoffs are becoming the norm, Google’s willingness to splurge billions on rehiring one single person, seems very odd, but also sends a strong message: AI is the battleground, and they’re determined to win, no matter what the cost.

But this move also raises concerns about how much power big companies like Google can wield over the AI space, potentially stifling innovation from smaller players.

Who Is Noam Shazeer, and why is Google desperate to have him
Noam Shazeer isn’t just any engineer; he’s one of the brains behind some of the most significant AI advancements of recent years. He first joined Google in 2000 and spent two decades making major contributions, most notably co-authoring the 2017 research paper Attention is All You Need.

This very paper laid the foundation for the AI tools we now take for granted, like ChatGPT and Google’s very own Gemini. Think of Shazeer as the father of modern-day AI chatbots.

Frustration at Google & Alphabet’s leadership
But things didn’t stay rosy at Google. In 2020, Shazeer and a colleague, Daniel De Freitas, created a chatbot called Meena, designed to hold intelligent conversations on a wide range of topics.

However, Google refused to launch it, worried that the bot might say something inappropriate. Frustrated, Shazeer left in 2021, taking De Freitas with him.

The duo went on to launch Character.ai, a chatbot platform that allowed users to interact with AI models representing celebrities, fictional characters, and even language instructors. It was a hit, raising $43 million in seed funding and attracting hundreds of thousands of users within weeks of its beta release.

But despite early success, *Character.ai* faced financial challenges. The cost of keeping the technology afloat was becoming difficult to manage, and the platform wasn’t quite going in the direction they wanted, with many users seeking AI-generated romantic conversations.

Google’s clever move or simply the power of money?
Fast forward to 2024, and Google has opened its wallet to the tune of $2.7 billion to get Shazeer, De Freitas, and Character.AI ’s tech team back under its roof. This wasn’t a simple buyout but rather a clever ‘reverse acqui-hire’ deal, where Google didn’t fully acquire the company. Instead, they licensed the tech and rehired key staff.

This approach allowed Google to sidestep regulatory concerns around monopolies and antitrust violations, which would have been triggered by a full acquisition.

This deal has drawn comparisons to similar moves by other tech giants, like Microsoft’s $650 million deal with Inflection AI and Amazon’s recent partnership with Covariant. The common thread in these deals?

Big Tech gobbling up to AI talent
Big Tech is strategically acquiring talent and technology without triggering legal scrutiny, raising concerns about whether this is fair to smaller, independent firms. After all, competition is key in the AI space, especially in its early stages, where fresh ideas and innovation are crucial.

Shazeer’s return to Google puts him in a leadership role for their main AI project, Gemini, alongside other heavyweights like Jeff Dean and Oriol Vinyals. As the AI race heats up, Google is clearly making sure it has the best minds on board to stay ahead.

But with all eyes on how the tech industry evolves, there’s no doubt that this mega-deal will spark plenty of discussion about the future of AI and the balance of power between big corporations and emerging innovators.