By Greg Bensinger and Krystal Hu

(Reuters) -Amazon.com hired away artificial intelligence startup Adept’s co-founders and some of its team in a move that echoes one by rival Microsoft, as it seeks to battle a perception that it is playing catch-up in AI.

Adept said in a blog post Friday that cofounder and CEO David Luan, as well as several other co-founders and employees were leaving to join Amazon.

The San Francisco-based startup, which has raised over $410 million and is valued above $1 billion, already named a new CEO.

The move is similar to one by Microsoft, which in March hired away much of Inflection AI’s leadership and employees and agreed to pay a roughly $650 million licensing fee.

That deal has attracted regulatory scrutiny – the Federal Trade Commission is looking into whether the deal was a play to skirt merger disclosure requirements, a person told Reuters earlier this month.

Adept said it would continue to operate independently of Amazon. Amazon will pay Adept a licensing fee to use some of its technology, which helps automate business functions. An Amazon spokesperson declined to disclose terms of the non-exclusive deal.

Amazon is investing towards training an ambitious large language model, Reuters has reported, hoping it could rival top models from Microsoft-backed OpenAI and Alphabet. The new additions from Adept signal the tech giant’s ambition to work on AI agents tools, an area major labs are focusing on.

Reuters reported earlier this month that Amazon is racing to update its Alexa voice assistant to fully integrate generative AI, which can respond almost instantaneously with full sentences to complicated prompts or queries.

The Amazon spokesperson said the Adept employees have already joined the company and about 20 Adept workers remain at the startup. Adept didn’t respond to a request for comment.

At Amazon, Luan and a number of others will report to Rohit Prasad, who oversees artificial general intelligence, or AGI. Others will join the team developing devices and other services, according to an internal memo viewed by Reuters.

Prasad, the former head of Alexa, who now reports directly to Amazon CEO Andy Jassy, brought in researchers working on Alexa AI and the Amazon science team to work on training models, uniting AI efforts across the company with dedicated resources.

Prasad said in the memo that the hires “will significantly help us on our quest to achieving AGI.”

Adept also held discussions with other tech companies including Meta, which decided not to pursue a tie-up or partnership, sources familiar with the matter told Reuters. Meta declined to comment.

(Reporting by Greg Bensinger in San Francisco and Krystal Hu in New York; Additional reporting by Max Cherney in San Franisco; Editing by Krishna Chandra Eluri, Sayantani Ghosh, Ken Li and Cynthia Osterman)

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