![](https://www.verdict.co.uk/wp-content/uploads/2024/03/GettyImages-1728615988.jpg)
Microsoft will pay Inflection AI $650m to license its AI software, following the shock announcement on Tuesday (19 March) that it was hiring co-founders Mustafa Suleyman and Karén Simonyan, along with most of the start-up’s staff.Â
The unusual deal has left Inflection AI, now with a much smaller workforce, looking to offload some of its computing power, according to a Bloomberg report, citing people familiar with the matter.
Microsoft said it would pay $620m to license Inflection’s AI models and has dedicated $30m to paying legal rights for mass hiring, according to sources.
The deal will reportedly make Inflection AI’s investors a return on investment, but it is likely to be less of a return than once thought, according to Bloomberg.
Inflection was previously valued at $4bn after raising around $1.3bn in 2023, following interest in its GenAI chatbot Pi.
Pi was marketed as a kinder and more reliable rival to OpenAI’s popular ChatGPT. However, former co-founder Suleyman said that Inflection had failed to find an efficient business model for the chatbot.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
![](/wp-content/themes/goodlife-wp-B2B/assets/images/company-profile-unit.png)
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataReid Hoffman, a Microsoft board member, said he would be staying at Inflection as a co-founder and director, stating that the deal was a “good day for everyone involved in Inflection”.
Inflection will remain in charge of its proprietary technology. The start-up said in a blog post that its AI models were well-placed to be “the AI platform for businesses around the world”.