Meta's latest test of $14.8 billion scale AI trading AI partnership

(Reuters) – Facebook owner Meta (Meta.O) A $14.8 billion scale investment in AI and hiring the CEO of a data label startup tests how the Trump administration sees the so-called Acquihire deal.

The deal, announced Thursday, was the second-largest in the meta. Facebook owners provide 49% non-voting stocks that use gig workers to manually label data, including customer meta competitors Microsoft (MSFT.O) and ChatGpt Creator Openai.

Unlike acquisitions and transactions that give control over the meta, this transaction does not require review by US antitrust regulators. However, if you believe they are structured to avoid these requirements or to infringe competition, they can look into the deal.

The deal appeared to be structured to avoid potential pitfalls, such as blocking access to competitors' scale services and giving meta to rival operations, but Reuters reported on Friday that Alphabet's (Googl.o) Google decided to cut ties with scale in light of meta's bets, with other customers deciding that they were stepping back.

In a statement, an AI spokesperson said businesses that work with major companies and governments are still strong as they work to protect customer data. The company declined to comment on Google's details.

Alexandr Wang, a 28-year-old CEO who has come to Meta as part of the deal, will remain on a board of size, but with appropriate restrictions centered around access to information.

William Kovasick, director of George Washington University's Competition Law Center, said large tech companies are likely to recognize the regulatory environment of AI partnerships as easy to navigate under President Donald Trump.

Trump's anti-trust enforcement officials said they didn't want to regulate how AI would develop, but they also showed suspicions of a large-scale high-tech platform.

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“It's going to make you think they'll keep a close eye on what the companies are doing. It doesn't necessarily instruct them to intervene in a way that discourages the relationship,” Kovasic said.

The Federal Trade Commission appears to be investigating past “Aquihire” transactions. Under the Biden administration, the FTC began enquiries on Amazon (AMZN.O) contracts to hire top executives and researchers from AI startup Adept, and adopted Microsoft's $650 million refracted AI contract. The latter allowed Microsoft to use the Ifferfrenct model and hire most of the startup staff, including co-founders.

Amazon's transactions were closed without further action from regulators. Also, more than a year after the initial investigation, the FTC has so far taken no enforcement action against Microsoft over inflections, but a larger probe is currently underway than practices in the software giant.

An FTC spokesman declined to comment Friday.

David Olson, a professor of antitrust at Boston College Law School, said taking non-voting shares in minority is meta smart.

“I think when someone comes after them, it gives them a lot of protection,” he said.

There are skeptics in meta trading. Sen. Elizabeth Warren, a Democrat from Massachusetts, who is investigating, said Meta's investments should be scrutinized.

“Meta can call anything this deal, but if it violates federal law to illegally crush competition or to force Meta to rule illegally, antitrust enforcers must investigate and block it,” she said in a statement Friday.

Meta is facing its own exclusive lawsuit by the FTC, but it is still unclear whether the agency will ask questions about investments of scale.

The US Department of Justice's antitrust division, led by former JD Vance Advisor Gail Slater, has recently begun considering whether Google's partnership with Chatbot Creator Character.AI is designed to avoid antitrust reviews, reported Bloomberg News. DOJ is asking Google to notify in advance of new AI investments as part of its proposal to curb the company's control in online searches.