Microsoft is ready to pay startup Inflection AI about $650 million to obtain licenses for the use of its software in the field of AI. In addition, most of Inflection AI's employees will move to Microsoft. Bloomberg writes about this, citing its own informed sources.
Earlier this week, Microsoft announced it had hired Inflection AI co-founders Mustafa Suleyman and Karen Simonyan, as well as most of the startup's 70 employees. The deal between the companies looked unusual, so lawyers and industry experts speculated that it could attract the attention of regulators who are closely monitoring compliance with antitrust laws in the field of AI.
Now that Inflection AI's workforce has been significantly reduced, the startup is trying to offload some of its computing power to allocate resources that could be used to train artificial intelligence models. The company is also seeking partial reimbursement from its cloud computing partner CoreWeave, according to the source. This move will help reduce the cost of building AI models as Inflection AI transitions from a consumer business model to an enterprise one.
The report said Microsoft will pay Inflection AI $620 million to license the use of the startup's artificial intelligence models and about $30 million to waive any legal rights related to mass hiring. Official representatives of Microsoft, Inflection and CoreWeave have not yet commented on this issue.
The deal with Microsoft is expected to provide Inflection AI investors with a modest return on their investment, as it is unlikely to generate much profit in the short term. Last year, the startup released a chatbot called Pi, which was positioned as a kind of personal assistant. Not long ago, one of the executives at Inflection AI said that the company could not find an effective business model.
As the startup plans to pivot, Microsoft board member Reid Hoffman will remain with Inflection AI as a board member and co-founder. The new CEO of the startup will be Sean White, who previously served as director of research and development at Mozilla.
If you notice an error, select it with the mouse and press CTRL+ENTER.