Microsoft agrees to pay Inflection AI $650 million primarily for licensing artificial intelligence The software acquisition comes in addition to a move earlier this week to hire much of the company’s staff, according to people familiar with the deal.
Microsoft surprised the AI industry on Tuesday by announcing it had hired Inflection co-founders Mustafa Suleyman and Karén Simonyan, as well as most of the company’s 70 employees. The unusual deal, first reported by Bloomberg News, resembled an “acquisition,” but there was no contract. Get. Some legal and industry experts have suggested that an inflexion deal with Microsoft could still raise antitrust concerns with U.S. regulators, who say Big Tech’s A.I. Investments and partnerships are being increasingly monitored.
Inflection is currently looking to significantly reduce its staff and free up some of its computing power for tasks such as training AI models, said the people, who spoke on condition of anonymity. . Discuss personal information. The company is seeking a partial refund from its cloud computing partner Coreweave, one of the people said. This move has the potential to reduce costs associated with building AI models as Inflection moves to an enterprise rather than a consumer business model.
As part of the deal, Microsoft will use Inflection’s AI models and One person said about $30 million would be paid to waive legal rights related to mass hiring. Financial terms were previously reported by The Information.
Microsoft and CoreWeave did not respond to requests for comment. Inflection AI declined to comment.
As previously reported by Bloomberg, the deal will bring a consensus among Inflexion’s investors and will result in a modest return on investment. But these investors are not expected to make big profits right away after raising $1.3 billion last year for what was once seen as an AI rocket ship, valued at $4 billion. do not have.
Last year, as investor interest in chatbots soared, Inflection debuted a bot called Pi that was positioned as a kind of personal assistant that was better and more reliable than its competitors. But Suleiman told Bloomberg this week: Inflection was not successful in finding an effective business model.
Venture capitalist and Microsoft board member Reid Hoffman will remain at Inflexion as a director and co-founder as the startup plots a new direction. The new CEO will be board member Shaun White, who previously served as chief research and development officer at Mozilla.
Inflection also maintains proprietary technology. Inflection said in a blog post Tuesday that he is well-positioned to serve companies including Microsoft. “Our success in training, tuning, and improving the performance of AI models at scale puts us in a unique position as the AI platform of choice for enterprises around the world,” the company said.
