How Microsoft is delivering positive results for Inflection AI VCs, as promised by Reid Hoffman
2 min read
Software giant Microsoft recently announced a major deal involving the acquisition of Inflection AI, a leading AI company. As part of the deal, Microsoft has agreed to make an undisclosed payment to investors of Inflection AI.
According to sources familiar with the matter, Microsoft is set to pay approximately $650 million for the deal. This includes $620 million for non-exclusive licensing fees and an additional $30 million to prevent any potential legal issues related to the poaching of Inflection’s co-founders.
Microsoft board member Reid Hoffman has assured that all investors in Inflection AI will benefit from the deal. Investors who participated in the early round of funding will receive 1.5 times their investment, while those in the later round will get 1.1 times their investment.
Inflection AI, which previously raised over a billion at a $4 billion valuation, will now shift its focus to becoming an AI studio specializing in large language model AI following the acquisition by Microsoft. The company’s Pi chatbot project, although promising, may have influenced Microsoft’s strategic move to secure a backup for its AI services.
The deal with OpenAI and potential regulatory challenges may have prompted Microsoft to explore new opportunities in the AI space. Microsoft’s reputation for a demanding work environment, along with the expertise of Inflection’s founders in next-gen AI, further shed light on the motives behind the acquisition.
As Microsoft continues to expand its presence in the AI market, the acquisition of Inflection AI highlights the company’s commitment to innovation and growth in this rapidly evolving industry.
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