The terms of a 201-page agreement between Amazon and Covariant, an AI company, allegedly placed significant restrictions on Covariant’s ability to sell licenses to other buyers. According to a whistleblower’s filing, these constraints effectively rendered Covariant a “zombie” company.
The filing included a transcript of a recorded chat, where the chief executive of Covariant expressed limited expectations for future sales following the deal. He reportedly hoped to sell only one or two licenses “probably for less than $10 million apiece,” the transcript indicated. The whistleblower alleged that Covariant’s lifespan after the deal was expected to be only a year, after which investors would divide a final $20 million payout from Amazon.
