AI talent wars

Author

Profit Monk
April 25, 2025

“It’s hard to do a really good job on anything you don’t think about in the shower.” ― Paul Graham

How Big Companies Invest in Startups to get AI talent

Money put into startups by big tech companies went up 20% last year.

But historically less than 1% of these investments turn into buyouts.

First some data from cbinsights. Google did 1672 equity rounds - but acquired very few.

So why do big tech companies do it? Here are some reasons -

Finding New Ideas

Big tech companies get to see new technology early. About 42% of company investors now care more about learning about new tech than buying companies outright. Other times - it’s just a defensive business move.

Making Business Friends

These investments often lead to working together. Nvidia does this best, through business deals with over 40% of the companies they invest in. This builds a group of smaller companies using their tech. Open AI was one of those companies.

Getting talent for AI

By investing in startups, big companies acquire talent later - very helpful as companies fight over AI experts.

Current holdings - for the quarter

If you had to own one stock today - we would say own NVDA

If you had to own 3 stocks today - we would say own - NVDA, COST, AVGO

If you had to own 5 stocks today - we would say own - NVDA, COST, AVGO, META and LLY

Not investment advice

"Take all the energy you spend on worrying about the past, worrying about the future, worrying about what others think, worrying about if you might fail... and channel that energy into one useful action within your control."

James Clear

PS: If you want to read more of James Clear - Read this

Japanese scientists have successfully created bite-sized chicken pieces grown from animal cells in laboratory conditions, marking a significant advance in cultured meat technology.

Sleep like a baby - all you need is this