Meta tried to buy Ilya Sutskever's $32 billion AI startup, but is now planning to hire its CEO
At the Meta Connect developer conference, Mark Zuckerberg, head of the Facebook group Meta, shows the prototype of computer glasses that can display digital objects in transparent lenses.
Andrej Sokolow | Picture Alliance | Getty Images
When Meta CEO Mark Zuckerberg poached Scale AI founder Alexandr Wang last week as part of a $14.3 billion investment in the artificial intelligence startup, he was apparently just getting started.
Zuckerberg's multibillion-dollar AI hiring spree has now turned to Daniel Gross, the CEO of Ilya Sutskever's startup Safe Superintelligence, and former GitHub CEO Nat Friedman, according to sources with knowledge of the matter.
It's not how Zuckerberg planned for a deal to go down.
Earlier this year, sources said, Meta tried to acquire Safe Superintelligence, which was reportedly valued at $32 billion in a fundraising round in April. Sutskever, who just launched the startup a year ago, shortly after leaving OpenAI, rebuffed Meta's efforts, as well as the company's attempt to hire him, said the sources, who asked not to be named because the information is confidential.
Soon after those talks ended, Zuckerberg started negotiating with Gross, the sources said. In addition to his role at Safe Superintelligence, Gross runs a venture capital firm with Friedman called NFDG, their combined initials.
Both men are joining Meta as part of the transaction, and will work on products under Wang, one source said. Meta, meanwhile, will get a stake in NFDG, according to multiple sources.
The Information was first to report on Meta's plans to hire Gross and Friedman.
Gross, Friedman and Sutskever didn't respond to CNBC's requests for comment.
A Meta spokesperson said the company "will share more about our superintelligence effort and the great people joining this team in the coming weeks."
Zuckerberg's aggressive hiring tactics escalate an AI talent war that's reached new heights of late. Meta, Google and OpenAI, along with a host of other big companies and high-valued startups, are racing to develop the most powerful large language models, and pushing toward artificial general intelligence (AGI), or AI that's considered equal to or greater than human intelligence.
Last week, Meta agreed to pump $14.3 billion into Scale AI to bring on Wang and a few other top engineers while getting a 49% stake in the startup.
OpenAI CEO Sam Altman said on the latest episode of the "Uncapped" podcast, which is hosted by his brother, that Meta has tried to lure OpenAI employees by offering signing bonuses as high as $100 million, with even larger annual compensation packages. Altman said "none of our best people have decided to take them up on that."
"I've heard that Meta thinks of us as their biggest competitor," Altman said on the podcast. "Their current AI efforts have not worked as well as they have hoped and I respect being aggressive and continuing to try new things."
Meta didn't respond to a request for comment on Altman's remarks.
OpenAI, for its part, has gone to similar lengths, paying about $6.5 billion to hire iPhone designer Jony Ive and to acquire his nascent devices startup io.
Elsewhere, the founders of AI startup Character.AI were recruited back to Google last year in a multibillion-dollar deal, while DeepMind co-founder Mustafa Suleyman was brought on by Microsoft in a $650 million purchase of talent from Inflection AI.
In Gross, Zuckerberg is getting a longtime entrepreneur and AI investor. Gross founded the search engine Cue, which was acquired by Apple in 2013. He was a top executive at Apple and helped lead machine learning efforts and the development of Siri. He was later a partner at startup accelerator Y Combinator, before co‑founding Safe Superintelligence alongside Sutskever.
Friedman co-founded two startups before becoming the CEO of GitHub following Microsoft's acquisition of the code-sharing platform in 2018.
NFDG has backed Coinbase, Figma, CoreWeave, Perplexity and Character.ai over the years, according to Pitchbook. It's unclear what happens to its investment portfolio in a Meta deal, a source said.
Don’t miss these insights from CNBC PRO
Latest World News copy
- A lesson for the West? Japan was better prepared than most for China’s rare-earth mineral squeezeJapan's transformation is seen as both a template for Western nations and a stark reminder of just how difficult it is to escape China's mineral orbit.
- After Zuckerberg spent billions on an AI 'dream team,' he has to deliver for Meta shareholdersMeta CEO Mark Zuckerberg has been on a two-week spending binge, hiring the priciest AI developers in an effort to make up for past setbacks.
- Iran, Israel launch new attacks after Tehran rules out nuclear talksIran and Israel exchanged fresh attacks early on Saturday, a day after Tehran said it would not negotiate over its nuclear programme while under threat.
- China's property sector has been in an extended slump. Shrinking population is making it worseChina's shrinking population is estimated to dent home demand by 0.5 million units yearly in the 2020s, Goldman Sachs estimates.
- Wall Street will continue to monitor the Iran-Israel conflict next week, with stocks at an impasseWhether stocks can continue to chart a path higher next week will depend in large part on developments on a raft of hurdles facing the market.
- Mineral-rich Greenland says it doesn't want to become a great mining nation. Here's whyGreenland has little interest in harnessing its massive resource potential to become a top mining country.