The phenomenon of promising startups in Silicon Valley's generative AI sector being absorbed by or closely aligned with major US tech companies is becoming increasingly common. Recently, startups such as Inflection AI and Adept have experienced the departure of their founders and key executives, who have quietly joined leading tech firms through discreet transactions. Critics argue that these moves are essentially acquisitions, cleverly orchestrated by companies like Microsoft and Amazon to evade scrutiny from competition regulators, a claim both companies vehemently deny. Meanwhile, entities like Character AI are reportedly facing difficulties in securing funding to maintain their independence, and startups such as French-based Mistral are considered particularly at risk of being acquired by a tech giant. OpenAI, the creator of ChatGPT, is also in a strategic partnership with Microsoft, which has invested $13 billion in the startup in exchange for exclusive access to its advanced models. Amazon, on the other hand, has its own agreement with Anthropic, which develops high-performance AI models. Participating in the AI revolution sparked by ChatGPT requires significant financial resources, typically only accessible to tech giants like Microsoft, Amazon, and Google. "Those with substantial financial backing are the ones setting the rules and shaping outcomes in their favor," noted Sriram Sundararajan, a tech investor and faculty member at Santa Clara University. Unlike traditional Silicon Valley narratives, generative AI, which produces human-like content rapidly, is a technology that demands immense computational power from specialized servers. "Startups in this field are often founded by former leaders from major tech companies and rely on the resources only large cloud providers can offer," explained Brendan Burke, an AI analyst at Pitchbook. Many of these startup founders, including those from Inflection and Adept, have backgrounds at Google or OpenAI. Mustafa Suleyman, a former leader at Google DeepMind and Inflection, has now moved to Microsoft's consumer AI division, taking key staff with him. While Inflection technically still exists, it has lost the assets that defined its value. Aligning with tech giants "makes strategic sense," according to Abdullah Snobar, executive director at DMZ, a Toronto-based startup incubator, as their financial backing ensures continued progress. However, this alignment could stifle competition and potentially lead to a scenario where "only these three major tech companies dominate the field of creativity and innovation." The critical question in Silicon Valley is whether government regulators will intervene. Large tech companies are increasingly under scrutiny for their aggressive acquisition strategies. For instance, Israeli cybersecurity firm Wiz recently abandoned plans to sell to Google due to potential regulatory hurdles. Regulators in the US, EU, and UK have expressed concerns over Inflection's ties with Microsoft, and Amazon's deal with Adept has caught the attention of the Federal Trade Commission. John Lopatka, a law professor at Penn State University, suggests that "antitrust enforcers might struggle to block these arrangements," though this does not preclude attempts to do so. A recent joint statement by US, European, and UK regulators indicates a growing focus on ensuring fair competition in the AI industry.