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How Big Tech Companies Are Hurting Startups Around the U.S.

April 14, 2020 ──── MRINetwork
Employment News, Employment Trends

How Big Tech Companies Are Hurting Startups Around the U.S.

The biggest tech companies in the United States are greatly affecting the industry’s startups in many surprising ways. That’s according to recent research and reporting by Bloomberg News on the heels of a slew of high-profile acquisitions in the last few years by companies like Apple, Facebook, Amazon and Google.

In an interview with Bloomberg, Matt McIlwain, managing director at Madrona Venture Group, said “it’s important that at least some emerging tech businesses remain independent.” He explains, “It is economically beneficial to society to have more stand-alone, independent companies. We generally think that’s better than just having these companies consolidated into larger ones.”

McIlwain adds that “there have to be some in each era that are willing to take the risk and stand the test of time as independent companies so we have the next generation of leading platforms.”

Meanwhile, the move comes as U.S. lawmakers have increasingly examined large tech companies for wrongdoing in recent months. “Regulators and lawmakers are investigating whether the largest U.S. technology companies have become too powerful,” according to Bloomberg. “Acquisitions are a major part of the probes, with the Federal Trade Commission re-examining hundreds of small deals from the previous decade made by Apple, Amazon, Facebook, Google and Microsoft.”

Small businesses and startups in the artificial intelligence space have been bought by tech giants in the past few years at an alarmingly high rate, according to the publication. “Last year saw a record 231 acquisitions of AI startups, up from 42 in 2014, according to data from CB Insights. Apple has been the top acquirer since 2010, followed by Google, Microsoft, Facebook, Intel Corp. and Amazon,” as noted by Bloomberg.

“If big tech companies buy them all up, they eliminate these future competitors, and have a chance of actually owning the winners,” said Sean Gourley, chief executive officer of machine-learning startup Primer AI, in an interview with Bloomberg.

By making such powerful acquisitions, the big tech companies are only getting larger and ever more powerful. While it’s a boon for the founders of these startups, it also creates a monopoly of sorts. This could potentially hamper innovation and lead to the collapse of many startups going forward.

While Apple, Facebook, Amazon and Google continue their spree of buying up small companies at a rapid pace, it’s up to startup owners and founders to make decisions about their futures: Are they okay with integrating with big tech? Or would they rather continue functioning independently in the name of innovation? That’s what the industry – and lawmakers – must work out going forward.