Artificial Intelligence

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Comment
Volume 93.4
When a Mass Resignation Becomes a Merger: Rethinking Asset Acquisitions for the AI Era
Nina Fridman
B.A. 2022, Northwestern University; J.D. Candidate 2027, The University of Chicago Law School.

I would like to thank Professors Douglas Baird and Eric Posner for their thoughtful advice and insight and the members of The University of Chicago Law Review for their invaluable feedback and edits.

This Comment argues “reverse acquihires”—deals in which a Big Tech firm poaches an AI startup’s team and then paysits shell hundreds of millions—constitute asset acquisitions subject to Hart-Scott-Rodino (HSR) Act review. While regulators typically review only tangible asset acquisitions under the Act, this Comment argues that regulators can mandate review of certain intangible asset transfers as well. Drawing on regulatory treatment of intellectual property licensing agreements, language from divestiture orders, and guidance from foreign competition authorities, this Comment demonstrates that reverse acquihires are acquisitions of AI startups’ most valuable assets: their business information and know-how.