– Microsoft is paying approximately $650 million to Inflection AI investors in a deal that includes licensing fees and a settlement to avoid legal action over poaching of co-founders and staff
– Investors in Inflection AI will receive 1.5 times their investment from the early round and 1.1 times their investment from the later round, with the remaining equity in the startup that will pivot to become an AI studio
– Microsoft’s acquisition of Inflection AI may be worth it due to the technical expertise of the co-founders and the need for a backup in its AI strategy, especially considering potential issues with its current partnership with OpenAI and internal conflicts with engineers
Microsoft is quietly paying around $650 million to take over Inflection AI, including licensing fees for the technology and an agreement not to sue over poaching of co-founders and staff. Investors are expected to receive returns on their investment, with the new company shifting focus to providing AI solutions for other companies. Despite potential controversy regarding the treatment of employees at Inflection, Microsoft sees value in acquiring the talent behind the startup, which includes former Google DeepMind engineers.
The move by Microsoft is seen as a strategic backup plan in case of regulatory issues or internal conflicts with OpenAI, with whom they have a partnership. Microsoft’s determination to establish its own AI capabilities is evident through this deal, but potential scrutiny from regulators on the acquisition remains a concern. The acquisition of Inflection AI represents Microsoft’s commitment to solidifying its position in the competitive AI market, with a focus on talent acquisition and potential future growth opportunities.