DeepMind is one of the UK’s most successful technology startups, having been acquired by Google for £400 million in January 2014.
Before the artificial intelligence research lab was acquired, DeepMind took several million pounds from a host of big name investors to help it scale up, including Tesla CEO Elon Musk and Skype cofounder Jaan Tallinn. But DeepMind’s first major investment came from renowned Silicon Valley venture capitalist Peter Thiel, who never normally invested in companies outside the US.
“I remember the first time I pitched to him, he decided to invest within the first meeting,” said Hassabis during a talk to entrepreneurs at Google Campus last month, which was uploaded onto YouTube last week. “But it took about three months before it actually was closed because the main sticking point was he wanted us to move to Silicon Valley.
“At that time he’d never invested outside of the US, maybe not even outside ofthe West Coast. He felt the power of Silicon Valley was sort of mythical, that you couldn’t create a successful big technology company anywhere else. Eventually we convinced him that there were good reasons to be in London.”
The AI race that’s taking place between Google, Facebook, Apple, Amazon, and Microsoft is all about talent at the moment. Tech firms want to get their hands on the best people in the field to strengthen their research teams, which they want to make breakthroughs that can be used in their products.
Hassabis told Thiel that London, the UK, and Europe had an untapped talent pool that he and his cofounders — Mustafa Suleyman and Shane Legg — could exploit, citing universities such as Oxford, Cambridge, Imperial, University College London, and Kings College London as prime examples.
“One of the things was I thought it [staying in London] was going to be a competitive advantage in terms of talent acquisition,” said Hassabis. He went on to claim that there weren’t that many intellectually stimulating jobs for physics PhDs out of Cambridge at the time that didn’t want to work for a hedge fund in the city.
“So I felt like we would have Europe to ourselves for a while, which was kind of how it was. That built up our initial first sort of 50 people or so, which was the critical mass we needed to go beyond that. Of course, now everyone knows that secret and there’s loads of startups. Hopefully DeepMind’s made it easier for all of you guys to raise money. We’ve shown that it’s possible and you can get a great exit and there is that talent here and the drive and the ability to create those kinds of companies here.”
Prior to the Google acquisition, DeepMind was also on the radar of Facebook, according to The Information. Both Google and Facebook wanted DeepMind to relocate to Silicon Valley but DeepMind was adamant that it remained in London.
Hassabis said that most companies in DeepMind’s position probably would have moved to the US.
“I was born in London and I’m a proud born and bred Londoner,” he said. “I obviously visited Silicon Valley and knew people out there and also I’d been to MIT and Harvard and seen the East Coast. There is this view over there that these kind of deep technology companies can only be created in Silicon Valley. Certainly back in 2010 that was definitely the prevailing view. I felt that that just wasn’t true.”
DeepMind now employs around 400 people in a Google office in King’s Cross London, as well as smaller teams at Google’s global headquarters in Mountain View and a research facility in Alberta, Canada. It is planning to scale up to 1,000 employees in the coming years, according to The Economist.
DeepMind’s successful exit to Google will have made Thiel his money back and then some. The exact amount is unknown.