On Nov. 14, travel platform Airbnb (ABNB 0.75%) did something it's never done since going public in 2020: It acquired another company. And according to people in the know, it spent a ton of money to do so.
Airbnb just acquired GamePlanner.AI for $200 million, according to CNBC's sources. That's a monster price tag for a start-up with just 12 people and no website. But according to Airbnb CEO Brian Chesky, GamePlanner.AI is "special" nonetheless.
GamePlanner.AI may indeed be special. But can it move the needle for Airbnb's shareholders? Here's what investors need to know.
What is known so far...spoiler: It ain't much.
Given the incessant barrage of artificial intelligence (AI) headlines, it's tempting to ignore this move by Airbnb. But there's a really good reason to pay attention in this case. GamePlanner.AI's co-founder is Adam Cheyer. Cheyer previously cofounded other start-ups including Siri (which is now owned by Apple) and petition website Change.org.
In short, Cheyer has started big things before. And GamePlanner.AI might just be the next big thing on his illustrious resume.
Investors unfortunately don't know what GamePlanner.AI does because the start-up has been in "stealth" mode. There's not even a record of funding from private investors.
However, Cheyer's background is with voice assistant technology like Siri, which is also known as a virtual assistant. Therefore, it seems plausible that GamePlanner.AI does something related to virtual assistants powered by AI.
Airbnb apparently believes GamePlanner.AI is worth $200 million. And if it's building AI virtual assistants as I suspect, then billionaire Bill Gates might agree with the price tag.
A-I-rbnb?
To be clear, travel companies are adopting AI solutions and Airbnb is no stranger when it comes to the space. In the company's most recent platform update (it releases new features every summer and winter), it had an AI feature for hosts. Hosts simply upload pictures and the AI will create a picture tour automatically.
Moreover, Airbnb's Chesky is close friends with Sam Altman, known for his work as CEO of OpenAI -- parent company of chatbot ChatGPT. No doubt Chesky is well acquainted with the AI space as he leads Airbnb in this area, thanks to his friendship with Altman.
Airbnb likely wants AI to be the star of its show in the future, not simply some background character. And this is where an AI personal assistant might come in.
"Virtual assistant" and "digital assistant" are interchangeable terms. According to Oracle, a digital assistant is a really advanced chatbot known as a predictive chatbot. And its AI models are essentially built using the personal information it has on the user. It takes anything it can find -- from age to purchase history -- to interact with the user.
In May, Bill Gates reportedly said that when someone figures out how to build a good AI virtual assistant, no one will ever go to Amazon again. His point wasn't that people will stop using Amazon's services. Rather, people will simply tell their virtual assistants to go shopping for them, based on what they like and what they're looking for.
This has huge implications for e-commerce. But it's also easy to see its applications for travel. Management for rival travel platform Booking Holdings has repeatedly talked about having an AI travel agent -- like the virtual assistant idea that has Gates so excited -- to help users plan and book trips. Perhaps Airbnb is envisioning something similar, and GamePlanner.AI pushes it closer to the goal.
It's fun to imagine pulling up the Airbnb app and simply telling it where you want to go and when. Then the AI travel assistant could get to work booking your stay, based on the amenities that it knows you like. But this concept is merely imaginary until Airbnb provides more details.
One final cautionary word
If this is what Airbnb is building, I'm not convinced it's a meaningful long-term driver of revenue or profits. The technologies adopted by one travel platform will likely be copied everywhere. Therefore, if AI travel agents become a thing, then Airbnb's acquisition of GamePlanner.AI is simply table stakes.
That said, it's important to me as an Airbnb shareholder for this acquisition to be successful. I greatly admire the company's profitability -- it has a free-cash-flow margin of 44% over the last 12 months, which is better than most public companies.
Generating profits is one thing. Making good capital-allocation decisions with profits is another. Airbnb has a lot going for it and this acquisition could be a good one. But it's important that the company demonstrates the ability to use profits to create more shareholder value over time, not destroy it. Therefore, I'll be watching Airbnb's AI journey more closely from here.
