We investigate the dynamic interplay between large incumbents (particularly Big Techs) that engages in corporate venture capital (CVC) investments and mergers and acquisitions (M&A), venture capital (VC) that finances startups, and startups that enter and exit the market. We aim to investigate the intricate mechanisms linking incumbents’, VCs’, and startups’ activities and affecting the technology life cycle. Theoretically, we build on previous research pointing to the “kill zone” and “innovation zone” effects of incumbents’ M&A activities, enlarging the analysis to CVC activities and moving from static to dynamic effects. Empirically, we juxtapose our findings from the Artificial Intelligence (AI) technology space with established frameworks of technology and industry evolution. Our research underscores the multifaceted roles played by incumbents in shaping the innovation ecosystem, especially within rapidly evolving domains like AI.
