Exclusive: Google to Buy Artificial Intelligence Startup DeepMind for $400M

Google is shelling out $400 million to buy a secretive artificial intelligence company called DeepMind.

Google confirmed the deal after Re/code inquired about it, but declined to specify a price.

Based in London, DeepMind was founded by games prodigy and neuroscientist Demis Hassabis, along with Shane Legg and Mustafa Suleyman.

This is in large part an artificial intelligence talent acquisition, and Google CEO Larry Page led the deal himself, sources said. According to online bios, Hassabis in particular is quite a talent, a child prodigy in chess who was later called “probably the best games player in history” by the Mind Sports Olympiad.

DeepMind has only a landing page for a website where it describes its business as building learning algorithms for simulations, e-commerce and games. Profiles on LinkedIn indicate the company is about three years old.

Sources said Founders Fund is a major investor in DeepMind, along with Horizons Ventures. Skype and Kazaa developer Jaan Tallinn was an investor and adviser (not a founder, as we initially described him).

Other Google AI experts include Jeff Dean and Anna Patterson. The company also recently hired Geoffrey Hinton part-time.

Update: Though DeepMind may not be a household name in tech, sources in the artificial intelligence community describe the company as a formidable AI player and say it has been aggressively recruiting in the space. One source said DeepMind has a team of at least 50 people and has secured more than $50 million in funding. This person described DeepMind as “the last large independent company with a strong focus on artificial intelligence,” and said it competed with companies like Google, Facebook and Baidu for talent.

Multiple sources said the company has been developing a variety of approaches to AI, and applying them to various potential products including a recommendation system for e-commerce.