Killer Theories and Acqui-Hire Alibis
Antitrust agencies have a habit of giving new labels to old anxieties. In artificial intelligence, the latest worry is that partnerships between large technology firms and startups are not partnerships at all, but mergers in clever disguises.
In the first article in this series, we examined how Brazil’s Administrative Council for Economic Defense (CADE) has approached this new generation of artificial-intelligence partnerships. We focused on the agency’s treatment of “reverse acqui-hires”—deals in which a company hires much of a startup’s team without formally buying the company—as concentration acts; its renewed reliance on Article 88, §7 call-in powers, which allow CADE to review certain transactions that fall outside Brazil’s mandatory-notification thresholds; and the practical distinctions that pushed Microsoft/Inflection—but not Google/Character.AI—into formal merger review.
Those procedural moves raise a deeper question: What theory of harm is driving CADE’s enforcement agenda?
CADE’s decisions suggest that the agency is increasingly borrowing from international debates over “killer acquisitions,” “talent hoarding,” and the loss of potential competition in digital markets. A “killer acquisition” occurs when an incumbent buys a smaller firm to shut down a potential future rival. “Talent hoarding” is the related claim that large firms hire scarce technical workers not to deploy them productively, but to keep them away from rivals. These theories sound tidy enough. The harder question is whether they rest on evidence sturdy enough to support intervention.
Before CADE completes its review of Microsoft/Inflection or opens further investigations into AI partnerships, that question deserves a closer look. This second article takes it up.