Date
20 August 2017
Having defeated the number one Go player Ke Jie (left), DeepMind’s AlphaGo will shift its focus to other AI applications such as healthcare and energy conservation. Photo: Reuters
Having defeated the number one Go player Ke Jie (left), DeepMind’s AlphaGo will shift its focus to other AI applications such as healthcare and energy conservation. Photo: Reuters

Why Google is always able to acquire great companies

Demis Hassabis and Mustafa Suleyman, the co-founders of Google’s DeepMind, the developer of game-playing computer program AlphaGo, recently met with Hong Kong billionaire Li Ka-shing and gave him an inside view of the world of artificial intelligence (AI).

Li reportedly displayed great enthusiasm and even brought out his pen and paper to take down notes from the lecture. He also stood up several times out of his excitement over the enormous potential of AI.

In fact, Li’s Horizons Ventures was one of the early investors in DeepMind, which was acquired by Google in 2014.

Start-ups usually need to raise several rounds of capital before seeking a public listing or getting acquired.

So why is Google able to time and again acquire great companies, including big names such as Android, YouTube and DeepMind?

Sharp vision alone can’t attract top companies. Google’s hands-off management style might be what actually sets it apart.

Entrepreneurs usually have their own way of understanding the world. They don’t like being supervised by a big boss. Therefore, they want to find an easy-going boss who also has the wherewithal to support them.

There has been talk of Tesla and Uber either merging or being acquired as both are losing money.

In my view, a Tesla-Uber merger is unlikely to occur. Both Tesla’s Elon Musk and Uber’s Travis Kalanick have strong personalities, and neither of them would be willing to cede control to the other.

Moreover, both companies are struggling with high debt and huge losses. So what’s the point of merging?

If they are to be acquired, who is the more likely buyer?

As we all know, Apple holds enormous amounts of cash. However, the company has a reputation for its rigid supply-chain management.

Will it be able to lure talents with strong characters using the same management approach?

If Tesla wants to invite investors, it would probably prefer someone who would keep a distance and not intervene so much in its operations.

There are many internet giants holding large amounts of cash, but very few of them are able to delegate power.

For those top technology talents, being given a free hand is more important than being given more money. Here is where Google has an edge.

Li, Hong Kong’s richest man, has openly admitted his strong interest in new technologies. Perhaps investors should also think about adding tech stocks to their portfolios.

This article appeared in the Hong Kong Economic Journal on May 31

Translation by Julie Zhu

[Chinese version 中文版]

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RT/CG

Columnist at the Hong Kong Economic Journal

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