Tech giant Microsoft will be paying artificial intelligence (AI) startup Inflection $650 million to license its software, a week after it roped in the company's two cofounders and most of its staff, as per a Bloomberg report.
As part of a deal struck with Inflection AI, Microsoft will pay $620 million to the company to license and use its AI models. The remaining $30 million will be paid to give up any legal rights the company may hold related to the mass hiring. The financial contours of the deal were first reported by US tech publication The Information.
Inflection AI is using this deal and the licencing fee to provide some investors, including Greylock and Dragoneer Investment Group, one-and-half times the return.
The AI company, valued at $4 billion last year after it raised $1.3 billion with Microsoft as its lead investor, will retain its proprietary technology, it said in a blog post earlier this week.
On Tuesday, Microsoft announced the hiring of Mustafa Surleyman, cofounder of Google's DeepMind and Inflection AI, as its consumer AI business head. Karen Simonyan, also a cofounder, and 70 other people were onboarded for Microsoft's newly created unit Microsoft AI. Suleyman will be the CEO of this vertical, with Simonyan as the chief scientist.
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