Rise of the Smart-Up
AI companies are getting snapped up in record numbers by tech giants hungry for brains. But are they really worth such big bucks?
Magic Pony is hardly a household name. Chances are you never heard of them, or at least not before they were bought for $150 million by Twitter a few weeks ago. They were a company of 14 people, and at that cost this acqui-hiring spree which sees them joining Twitter’s Cortex division priced each of them at over $10 million.
But although that’s certainly at the top end of the scale as far as talent acquisition goes, it’s far from an anomaly in the world of AI these days. A report by Magister Advisors reveals that the average price per high-quality employee in these acquisitions averages $2.4m. The technology advisory firm, which specializes in Mergers and Acquisitions (M&A) tracked 26 AI-driven deals since 2014 in the US, Europe and Israel, 11 of which involved companies with less than 50 employees which were acquired largely, or entirely, for the team and capability.
“A good AI engineer is worth more than many company CEOs right now,” says Victor Basta, managing director at…
