Google is buying another pricey startup, Deep Mind, for a reported $US400 — 500 million.
That sounds cheap compared to the $US3.2 billion it paid for smart hardware startup, Nest.
Here’s what you need to know about DeepMind:
Who founded it: DeepMind was founded by Demis Hassabis, Shane Legg and Mustafa Suleyman in late 2010. Hassabis is an avid chess player whose Elo rating was so good, he was once considered the second-best Under-14 player in the world.
What it is: DeepMind is a London-based artificial intelligence company that helps computers learn and operate like humans. It has created a number of e-commerce applications and games with its technology. “We combine the best techniques from machine learning and systems neuroscience to build powerful general-purpose learning algorithms,” DeepMind’s scant website says.
How many people work there and who funded it: According to DueDil, a startup that collects information about other companies, DeepMind has somewhere between 50 and 75 employees. Re/code estimates the company has raised $US50 million but DueDil shows its cash on hand at $US23 million. Investors include Founders Fund, Horizon Ventures, Skype co-founder Jaan Tallinn and Elon Musk.
Why Google cares: DeepMind was reportedly in deep talks with Facebook late last year. Larry Page helped Google win the deal, Re/code’s Liz Gannes reports. DeepMind was also competitive with Google for talent.
Google has been been building out an AI arm for some time. Google’s working on self-driving cars, for example, and it’s partnering with NASA on another AI initiative for space exploration. It has also bought smart hardware and robotic companies Nest and Boston Dynamics in recent months and hired futurist Ray Kurzweil. This is Google’s fourth acquisition in 2014.
Google may want an AI arm to derive more information from all the data it collects. “AI and machine learning expertise can help improve the efficiency and quality of data gathered by Google and other companies who rely on said information, but it can also set the company up for the next major stage in computing interaction: turning the Internet of Things into the Internet of Companions,” writes TechCrunch’s Darrell Etherington.
What the acquisition means for London’s tech scene: London has emerged as a startup hotbed in recent years. It has produced buzzy startups such as Lulu and one of its earliest (and largest) successes is Skype.
Eileen Burbidge has been a London-based venture capitalist for a number of years. She compiled a list of some of England’s largest startup acquisitions. DeepMind falls in the top 10.
- 2014 Deepmind acquired by Google $US500 million
- 2011 Autonomy acquired by HP for $US10 billion
- 2011 Skype acquired by Microsoft for $US8.5 billion
- 2011 LoveFilm acquired by Amazon $US330 million (reported)
- 2010 Sophos partially acquired by Apax, valuing company at $US830 million
- 2010 MessageLabs acquired by Symantec $US695 million
- 2009 Playfish acquired by EA $US400 million
- 2009 Scansafe acquired by Cisco $US183 million
- 2007 Xensource acquired by Citrix $US500 million
- 2007 QXL tradus (ricardo) acquired by Naspers $US1.6 billion
- 2005 Skype acquired by eBay $US2.6 billion
- 2005 Lastminute.com acquired by Sabre/travelocity $US954 million