Artificial Intelligence Teams Being Acquired For $2.5m/employee; Employee Value Often Far Exceeds Business Value

Twitter just paid $150m for 14-person Magic Pony, a UK-based AI visual search company barely anyone had heard of before the deal. At $10m per employee it marks a high water mark in AI for what is essentially a team acquisition. Magister has tracked 26 AI driven deals since 2014 in the US, Europe and Israel, 11 of which involved companies with less than 50 employees which were acquired largely, or entirely, for the team and capability. Across all 11 deals, the median price paid per employee has reached $2.4m, meaning a high quality AI company with 40 employees would be valued at near $100m. Even if it had little or no revenue.