The exact amount Microsoft is paying to investors of Inflection AI in their deal to acquire the co-founders, staff, and technology rights remains undisclosed. Microsoft declined to comment when asked. However, sources reported to The Information that Microsoft is likely paying around $650 million, with $620 million for non-exclusive licensing fees and $30 million to prevent legal action from Inflection.
Reid Hoffman, a board member at Microsoft and co-founder of Inflection, assured investors in a LinkedIn post that they would have a favorable outcome from the deal. Investors from various funding rounds will receive returns on their investments, even though the total does not equal $650 million.
Despite initial plans to develop a personalized AI chatbot named Pi, Inflection is pivoting to become an AI studio specializing in large language model AI. Notably, Inflection raised over a billion dollars in funding before being acquired by Microsoft.
Microsoft’s acquisition of Inflection signifies a strategic move in the AI market and may offer valuable expertise from Inflection’s co-founders, who have experience in next-gen AI technologies. This decision aligns with Microsoft’s need for a robust AI strategy and potential future regulations from the FTC.
Given some challenges with OpenAI and previous partnerships, Microsoft’s acquisition of Inflection appears to be a calculated move in diversifying its AI portfolio and reducing dependency on existing collaborations.
It remains to be seen how this acquisition will impact Microsoft’s overall AI strategy and relationships within the industry, but it represents a significant investment in the company’s future technological capabilities.
As with any major deal in the tech industry, regulatory scrutiny may follow the acquisition, potentially shaping the future landscape of AI partnerships and collaborations.
