Generative artificial intelligence has been the topic of 2023, and companies have taken note with bigwigs speaking openly about plans to integrate the technology.
But Airbnb's recent acquisition of GamePlanner.AI and Mondee's acquisition of Purplegrids -- both announced last week -- hint at a different kind of strategy, one that may have developed in the interest of speed as companies race towards an AI-focused future.
Paul English, co-founder of Kayak and founder of Deets, which provides travel guides powered by AI, said that "every single company" will change with the advent of AI. But he doesn't believe that evolution will happen top-down.
"Incumbents generally don't lead platform shifts -- it's never happened in the industry -- newcomers do," English said during an interview last week at the Phocuswright Conference in Fort Lauderdale. "I think it is very wise for Airbnb and other companies to do some acquisitions of some young companies because young companies -- it's a fact -- they move faster. And the thing that wins in technology is whoever has the fastest cycles with the smallest teams."
Airbnb, Mondee on acquiring AI platforms
With Airbnb's announcement that it is buying GamePlanner.AI and Mondee's announcement of its Purplegrids purchase, the new parent companies are seeking to implement more AI into their own strategies.
Orestes Fintiklis, vice chairman and chief corporate strategy and business development officer at Mondee, said with the acquisition of Purplegrids, Mondee has become "among the first travel verticals" that's acquired its own full AI platform.
"The fact that the transaction closed on the same day that Airbnb acquired GamePlanner.AI validates the thesis that the most efficient and speedy approach to enhancing an AI platform is to apply it to deep, vertical data," Fintiklis said. "In the case of Airbnb/GamePlanner, that is traveler behavior data. In the case of Mondee/Purplegrids, even more uniquely, both traveler behavior and expert curation data."
Upon its acquisition, Brian Chesky, Airbnb co-founder and CEO, called GamePlanner "special."
"AI will rapidly alter our world more than any other technology in our lifetime, but we need to ensure that it augments humanity in a positive way," Chesky. "Airbnb is one of the more humanistic companies in technology, and I believe that, together ... we can develop some of the best interfaces and practical applications for AI."
As for what Airbnb will use GamePlanner.AI's tech for, Christian Watts, founder and CEO of Magpie Travel, believes it may become the basis for an Airbnb AI travel agent -- something Chesky has mentioned in the past.
"Probably voice first, which might be a jump, but if anybody can jump to a voice-first tool, it's a tech and consumer brand like Airbnb," Watts said.
Fintiklis added that Mondee is applying AI in the context of it working as a travel assistant but said it can be applied everywhere. "It will be the continuation of the journey, not just in the front end, but every aspect of our business."
Mondee's cost structure is largely made up of sales and marketing, so Fintiklis expects to use AI for marketing efficiency in the beginning, with the contingency that it can be used in every area of business.
Will more big names acquire small AI platforms?
English said he sees more acquisitions happening.
Typically, when there's a platform shift, English said big companies tend to buy up smaller companies.
For example, he said, when the internet was emerging with the original version of the web pushed out into the world, big tech companies snapped up young internet teams.
"It happened with mobile, and it's happening again in AI, and I think it's going to happen in a big way," English said.
Evan Konwiser, chief marketing and strategy officer for American Express Global Business Travel was on the same page as English.
"This is not a surprise, and there will be more to come," Konwiser said. "Amex GBT bought 30 Seconds to Fly in 2020 for the same reasons -- to augment and accelerate our internal AI capabilities with proven teams."
As far as how far the acquisitions go, Konwiser said we're "scratching the surface."
"As AI improves, more vertical-specific solutions will emerge," he said. "They'll be snapped up by large companies and put to work at scale."
Watts agreed, noting "one would expect to see many of the big players snapping up smaller companies." But he added a caveat: Companies may wind up paying a high price to incorporate already developed AI from smaller platforms.
"When you have to move quickly, and everybody has to move quickly now, you overpay," Watts said. "It's not necessarily a bad thing -- speed to market can trump all other valuation fundamentals in a time like this, with GenAI disrupting industries at a pace never seen before."
Source: PhocusWire