We cover the topic of acquihires on Bloomberg Tech regularly. It was a mainstay story in 2025. When does a talent deal stop being a talent deal and become more than that, become a merger? What are the rules-based approach that the FTC would take? Chairman, to look at that.
Yes, we are examining. Look, acquihires have been around, especially in this sort of startup founder space for a long time. And they've gotten bigger basically in the last decade. And a lot of people are of the view that these things were sort of being constructed in these big deals to try to escape, you know, Hart-Scott-Rodino review, which is pre-merger antitrust review in the United States because the Biden administration was trying to block all deals. And I think generally they were. That isn't, you know, necessary anymore. We don't need clever workarounds for antitrust review anymore because at the FTC under the Trump administration, you get a fair shake. I'm not saying your deal will go through. I've sued to block several deals this year and I've won those cases. But if your deal is not illegal, we get out of the way and sort of let the market take care of things.
So we are beginning to examine that. The HSR Act has a provision that says you're not allowed to structure deals in order to escape pre-merger review. And so we are beginning to examine these acquihires to make sure that they aren't attempts to get around HSR review. But the message I want to send sort of to Silicon Valley and to the M&A infrastructure generally is you55 780' 0533 33535天 78555 0'35 0'55''7 0557 7710天 775550577天7770天5天天天'5,0777''557075 00,,天 775-天0天7'5'0077天天天''最小最小最小的''天''''00:01:43
The language of clever or creative deal structures that I cited at the beginning of our conversation was from your colleague and fellow commissioner Mark Meadows, right, who was speaking at a conference in California yesterday. I think what the industry hopes to understand from you is what the threshold is or what the set of rules would be where a hiring proposal or situation should be reported to antitrust authorities.
It should be, yeah, simple as that. It should be by right reported. Yeah. And, you know, we are beginning to examine how these deals work. Acquired deal structures vary from deal to deal. And so there wouldn't necessarily be a sort of a one-size-fits-all rule. But we are beginning to examine these big acquihire deals that raise a lot of attention so that we can understand when an acquihire is in fact an acquisition that might be covered by the pre-merger review laws and when it's not.
And we need to understand them before we're sort of out there telling people what the rules are. But this is, you're right. This has become a big enough deal that we are beginning to look very closely at how these things work, including, you know, determining whether we need to promulgate additional guidance here in the coming months about how we understand these acquihires.
Is there a factor that matters more to, you know, the number of employees hired or putting a value on the intellectual capital or the competitive advantage that such a transaction would give the acquirer?
So the value that matters for HSR is set by the statute. That's not really here or there. But the HSR Act applies to deals where assets or stock are being purchased, and that's what triggers HSR review. And so what we need to understand, which is why we're beginning to examine this question now, is when does an acquihire, you know, involve the sale or the acquisition of assets or stock in a way that would trigger the statute? Look, at the end of the day, I'm a lawyer and a law enforcer, and I enforce statutes and the statutes have texts. And so it's my job to understand whether things happening in the marketplace trigger the text that Congress has actually passed for us.
But that's what we're looking at. We're not trying to set sort of, we wouldn't be setting like acquihire rules generally. We would be looking at deals and trying to understand, you know, does this in fact involve the acquisition or sale of assets or stock and or is anything being structured as an attempt to circumvent review? But, you know, I'm not here to say this is what the rules are. There will be, you know, hard and fast clear rules. There aren't even for the ordinary deals. We've got the, you know, the HSR Act and the HSR rules, but deal structures even in ordinary M&A vary widely. And so we have to apply the text that Congress actually wrote to specific deals.
But acquihires have become frequent enough and large enough that we are beginning to look at the appropriate way to apply the law that Congress actually adopted to acquihires. I don't, it's not my job as an enforcer to sort of fit square pegs into round holes, but it is my job to make sure that the will of Congress, which is the will of the people at the end of the day, is being followed. And that's what we're here to try to do. We're trying to figure out how that applies in the case of acquihires.
Chairman, how common is this in the field of artificial intelligence or how often is this particular scenario arising and crossing your desk from the AI industry?
We've seen, you know, a couple in the last 12 months. My understanding is that the acquihire sort of structure, if you want to call it that, where, you know, a firm acquires a lot of the talent in the firm is pretty old, has been going on for a long time, but it often involved very small firms. And I think the reason that a lot of people are starting to notice it is because now it involves much larger firms and the sort of price being attached to obtaining the talent or licensing IP is in the billions.
So I've definitely seen a couple in the AI space this year, which is what has a lot of the attention. And it's why we're beginning to try to examine how are these working and how does the law that Congress passed governing pre-merger review actually apply here, as well as the provision in the pre-merger review law that says you can't structure a deal in order to try to escape HSR review. So that is what we are trying to understand now. But certainly, I mean, you all have reported on them. You can read about it in The Wall Street Journal. It's definitely true that there have been a couple of these big ones in the area.
You are live with us on Bloomberg Television, Bloomberg Radio around the world. We're speaking to Andrew Ferguson, chairman of the FTC. I think the biggest case study of late, just to give an example of the structure, is Nvidia and Grok, because you know what Nvidia CEO Jensen Huang told me a couple of weeks ago is they hired about 400 engineers, but it also included the licensing of the core technology and at a $20 billion value. But over a set time horizon, Grok exists as a company still, but with a focus on one of its business lines. That hiring and licensing of technology format. Is there anything specific there, Chairman?
