Microsoft Pays $650M for AI Startup Inflection, Securing Talent and Tech as Backup to OpenAI
• Microsoft is paying $650M total - $620M for licensing fees to use Inflection's AI technology, $30M for Inflection not to sue over poaching staff • Investors will get 1.5x their money back from early round, 1.1x from later round; they keep equity in remainder of Inflection • Inflection was building a personalized chatbot "Pi" using 22,000 Nvidia chips but will now pivot to be an AI services studio • Deal provides soft landing for Microsoft board member Reid Hoffman's failed investment in Inflection via his VC firm Greylock • Microsoft gets Inflection's AI talent as backup option amid regulatory scrutiny of OpenAI deal, engineering relationship issues