What You Need To Know About The Stealth Startup Google Dropped ~ $500 Million On, DeepMind

Google is buying another pricey startup, Deep Mind, for a reported $400 - 500 million.

That sounds cheap compared to the $3.2 billion it paid for smart hardware startup, Nest.

Here's what you need to know about DeepMind:

Who founded it: DeepMind was founded by Demis Hassabis, Shane Legg and Mustafa Suleyman in late 2010. Hassabis is an avid chess player whose Elo rating was so good, he was once considered the second-best Under-14 player in the world.

What it is: DeepMind is a London-based artificial intelligence company that helps computers learn and operate like humans. It has created a number of e-commerce applications and games with its technology. "We combine the best techniques from machine learning and systems neuroscience to build powerful general-purpose learning algorithms," DeepMind's scant website says.

How many people work there and who funded it: According to DueDil, a startup that collects information about other companies, DeepMind has somewhere between 50 and 75 employees. Re/code estimates the company has raised $50 million but DueDil shows its cash on hand at $23 million. Investors include Founders Fund, Horizon Ventures, Skype co-founder Jaan Tallinn and Elon Musk.

Why Google cares: DeepMind was reportedly in deep talks with Facebook late last year. Larry Page helped Google win the deal, Re/code's Liz Gannes reports. DeepMind was also competitive with Google for talent. Google has been been building out an AI arm for some time. Google's working on self-driving cars, for example, and it's partnering with NASA on another AI initiative for space exploration. It has also bought smart hardware and robotic companies Nest and Boston Dynamics in recent months and hired futurist Ray Kurzweil. This is Google's fourth acquisition in 2014.

What the acquisition means for London's tech scene: London has emerged as a startup hotbed in recent years. It has produced buzzy startups such as Lulu and one of its earliest (and largest) successes is Skype.

Eileen Burbidge has been a London-based venture capitalist for a number of years. She compiled a list of some of England's largest startup acquisitions. DeepMind falls in the top ten.