Microsoft made headlines last week, hiring Mustafa Suleyman to lead its internal AI group. Suleyman is a big name in the world of artificial intelligence, namely because he co-founded the influential British research lab DeepMind that was acquired by Google in 2014 for over $500 million. But in hiring Suleyman, Microsoft also kinda, maybe, sorta acquired his current AI startup, called Inflection AI.
Microsoft didn’t just hire Suleyman and co-founder Karén Simonyan, but it hired “most of the staff” of the $4 billion startup. It then paid the remaining husk of Inflection $650 million to license its technology, which Inflection is using to pay off its remaining investors. It’s as close to an acquisition as you can get without actually buying a company. And there's a good reason for this: The current antitrust environment is tough for tech. The government has a watchful eye on mergers and so, Big Tech has often opted against buying startups outright: We’ve seen Microsoft invest $13 billion in OpenAI, while Amazon and Google have each poured billions each into Anthropic.
But the government has broad authority over mergers, even if they’re partial or untraditional in nature, experts told GZERO recently. Put simply, we’d be surprised if this acqui-hire of sorts is enough to deter the government’s antitrust enforcers, who are already sniffing around Microsoft’s investment and power over OpenAI.