As competition in the artificial intelligence sector intensifies, Google DeepMind has reportedly secured a new licensing and talent agreement with AI startup Contextual AI, further strengthening its AI research capabilities.
According to reports, Alphabet’s AI research division will bring in more than 20 researchers from Contextual AI while also licensing the startup’s technology as part of the agreement. The deal is said to be valued between $80 million and $90 million.
Contextual AI co-founder and CEO Douwe Kiela is also expected to join Google DeepMind under the arrangement.
Neither company officially commented on the deal. However, the move highlights a growing trend among major technology firms to secure AI talent and technology through licensing agreements instead of direct acquisitions.
The agreement follows similar deals by Google in recent years. In 2025, the company reportedly paid $2.4 billion in licensing fees to access technology from AI coding startup Windsurf while hiring several of its key employees. Earlier, Google also signed a licensing agreement with Character.AI for access to its large language model technology.
These types of deals, often called “acquihires,” are becoming increasingly common in the AI industry. Instead of purchasing a company outright, large firms hire talent and license technology without taking ownership stakes. This approach usually avoids formal review from US antitrust regulators.
Regulators, however, have raised concerns over such arrangements. Acting Assistant Attorney General Omeed Assefi earlier described efforts by companies to bypass antitrust scrutiny through acquihires as a “red flag.”
The latest agreement also comes after Nvidia signed a similar licensing and hiring deal with AI chip startup Groq in December 2025 without acquiring the company.
Contextual AI had raised $80 million in its Series A funding round in 2024. The funding was led by venture capital firm Greycroft, along with participation from Bain Capital Ventures and Lightspeed.
The growing number of AI talent and licensing deals reflects the intense race among global technology companies to strengthen their artificial intelligence capabilities and secure specialised research talent.
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