Against the backdrop of artificial intelligence fever, the buzz in the secondary market is subsiding while the primary market is snapping up.
Explosive AI startups such as OpenAI are being snapped up by investors, with three M&A deals struck on Monday alone, news giant Reuters coming down the pike, and even the largest acquisition in the AIGC (generative artificial intelligence) space.
Three M&A in one day, the largest acquisition in the AIGC field finalized
On June 26, local time, Thomson Reuters announced it had acquired AI legal startup Casetext for $650 million and said it would complement its existing artificial intelligence initiatives.
"The acquisition of Casetext is another step in our 'build, partner and acquire' strategy to bring AIGC solutions to our clients," said Steve Hasker, president and CEO of Thomson Reuters, in a press release. "We believe Casetext will accelerate and expand the market potential of these products of ours - revolutionizing the way professionals work and the work they do."
The transaction is expected to close in the second half of this year.
Founded in 2008, Thomson Reuters is a business and professional intelligence information provider formed by the merger of The Thomson Corporation (Canada) and Reuters Group PLC (UK), with business segments including news agency Reuters and legal research platform Westlaw.
Founded in 2013, Casetext uses AI and machine learning to provide technology services to legal professionals. According to the statement, the company has acquired access to OpenAI's GPT-4 Big Language model, which also powers its recently launched AI legal assistant, CoCounsel.
On the same day, two other AI company acquisitions were agreed to in deals.
On Monday big data giant Databricks announced it had signed a definitive agreement to acquire San Francisco-based AI startup MosaicML for $1.3 billion, making it the largest known acquisition within the AIGC space so far this year.
Notably, MosaicML is a very young generative AI company, founded in San Francisco in 2021, with only one round of publicly disclosed funding and only 62 employees. In its last round of funding, it was valued at $220 million, meaning that the valuation of MosaicML jumped six times directly with this acquisition.
Meanwhile, financial automation platform Ramp has acquired OpenAI rival Cohere.io. Ramp said the deal aims to bring AIGC to the financial sector to help automate customer workflows, improve user experience and reduce costs and efficiency for businesses.
OpenAI shares soar after mad rush
For every month so far this year, AI and machine learning have been the most in-demand areas for investment, accounting for 25 to 30 percent of investor interest, according to private equity marketplace EquityZen Securities Inc. On Rainmaker Securities, a private marketplace stock exchange, investors are snapping up shares of some of the hottest AI startups of the year, such as OpenAI and Anthropic.
"Institutional investors are becoming more aggressive," said Brianne Lynch, head of market insights at EquityZen, in an interview with Bloomberg. She also said retail investors have also picked up their trading in AI since May.
Glen Anderson, co-founder of Rainmaker, noted that the number of buyers exceeded the number of shares looking to sell, resulting in prices well above those of earlier funding rounds.
Bidders were willing to pay a 25 percent premium over the most recent round, he said, while investors' bids for OpenAI soared to $80 from $67 in the last round of offers.