Microsoft delivers positive outcome for Inflection AI VCs as promised by Reid Hoffman.


Microsoft is making headlines with its deal to acquire Inflection AI, which includes the co-founders, staff, and technology rights. While the exact amount of the deal remains undisclosed, sources suggest Microsoft is paying around $650 million. The deal includes licensing fees for the technology and a settlement to prevent any legal action from Inflection. Microsoft board member Reid Hoffman, a co-founder of Inflection, assured investors of a positive outcome and future potential in a recent LinkedIn post.

Inflection, a startup founded in 2022, raised over a billion dollars at a $4 billion valuation before being acquired by Microsoft. The new direction for Inflection post-acquisition involves transitioning from a chatbot project to becoming an AI studio for large language model AI. The shift in strategy aligns with Microsoft’s broader AI objectives and competition with other tech giants in the AI space. With a reputation for being a challenging workplace, Microsoft sees potential in Inflection’s technical expertise, particularly in building large language models.

Microsoft’s acquisition of Inflection is seen as a strategic move to bolster its AI capabilities and reduce dependence on partners like OpenAI. The deal comes in light of regulatory scrutiny on AI partnerships and potential conflicts among engineers. By absorbing the talent and technology of Inflection, Microsoft aims to strengthen its AI portfolio and navigate potential regulatory challenges. The future trajectory of this deal will be closely watched by industry observers and stakeholders to gauge its impact on Microsoft’s AI ambitions.

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