Finance
Acquihires, Often Used by Big Tech, Are a 'red Flag,' Doj Antitrust Head Says
Published by Global Banking & Finance Review®
Posted on March 18, 2026
2 min readLast updated: March 18, 2026
Quick Summary
DOJ Antitrust chief Omeed Assefi warns that 'acquihires'—Big Tech hiring startup teams and licensing IP without full acquisitions—can be used to dodge merger reviews, calling such deals a regulatory “red flag.” Nvidia’s December 2025 Groq deal exemplifies this trend.
DOJ Antitrust Chief Warns Acquihires by Big Tech Are Regulatory Red Flags
By Jody Godoy
Regulatory Concerns Over Acquihires in Big Tech
March 18 (Reuters) - Companies’ efforts to sidestep U.S. antitrust scrutiny through tactics such as “acquihires” - a strategy some Big Tech firms use to snap up talent at artificial intelligence startups - are a “red flag,” the top U.S. antitrust enforcer told Reuters on Wednesday.
Understanding Acquihires and Their Impact
Acquihires, where the world's biggest technology firms pay large sums in deals with promising startups to take their technology and talent, but stop short of formally acquiring the target, are increasingly being viewed by antitrust regulators as an attempt to evade merger rules. In one recent example, Nvidia in December agreed to license chip technology from startup Groq and hire its CEO, without buying the company.
How Acquihires Circumvent Merger Review
When companies make acquisitions, they hand over information about a proposed transaction to federal antitrust enforcers. "Acquihires" allow companies to essentially absorb other firms without going through that formal merger review process.
DOJ Perspective on Circumvention Tactics
"When I see conduct that appears aimed to circumvent that process, as a litigator, as an enforcer, that's more of a red flag to me than if you had just participated and complied" with the review process, said Acting Assistant Attorney General Omeed Assefi.
Encouraging Compliance with Merger Reviews
He said companies should be willing to engage in the merger review process. That way, the DOJ can quickly understand and address any concerns, or, if the deal has no competitive issues, end its review early and let the deal close, he said.
Ongoing Investigations and Confidentiality
Assefi declined to discuss ongoing matters or particular companies.
(Reporting by Jody Godoy; editing by David Gaffen)
Key Takeaways
- •Omeed Assefi, Acting Assistant Attorney General for Antitrust, flagged acquihires as attempts to sidestep formal merger scrutiny, emphasizing that such behavior draws heightened enforcement attention. (sidley.com)
- •Nvidia’s agreement with Groq—structured as a non‑exclusive IP license plus hiring of key executives like Groq’s CEO—is widely seen as an acquihire designed to avoid HSR merger review while neutralizing a competitor. (tomshardware.com)
- •Regulators and lawmakers, including Senator Elizabeth Warren, are increasingly urging the DOJ and FTC to scrutinize these arrangements—and possibly block or unwind them—as they may function as de facto mergers that erode competition. (creditandcollectionnews.com)
References
- New U.S. DOJ Antitrust Leadership Signals More Criminal Prosecutions and Longer Prison Sentences | Insights | Sidley Austin LLP
- Nvidia buys AI chip startup Groq's assets for $20 billion in the company's biggest deal ever - Transaction includes acquihires of key Groq employees, including CEO
- Sen. Warren, others urge FTC, DOJ to scrutinize tech AI 'acquihire' deals for antitrust violations - Credit and Collection News
Frequently Asked Questions about Acquihires, often used by Big Tech, are a 'red flag,' DOJ antitrust head says
1What is an acquihire?
An acquihire is when a company pays to acquire the technology and talent of a startup without formally purchasing the business.
2Why are acquihires a concern for antitrust regulators?
Antitrust regulators view acquihires as a tactic to evade merger rules and formal review, raising red flags about competition.
3How do acquihires bypass antitrust scrutiny?
By absorbing talent and technology without full acquisitions, companies avoid submitting deals for formal antitrust review.
4Which example of an acquihire was cited in the article?
Nvidia agreed to license chip technology from Groq and hire its CEO without purchasing the company.
5What does the DOJ recommend regarding acquihires?
The DOJ suggests companies participate in the merger review process to address or clear potential competitive concerns.
