Microsoft Agreed to Pay Inflection $650 Million While Hiring Its Staff

Microsoft doesn’t want its plan to hire two of Inflection AI’s co-founders and most of its 70-person staff to be seen as an acquisition. But it’s still writing a hefty check to the two-year-old artificial intelligence startup.

The software giant has agreed to pay Inflection approximately $650 million, mostly in the form of a licensing deal that makes Inflection’s models available for sale on the software giant’s Azure cloud service, according to a person involved in the transaction. The startup is using the licensing fee to help provide its investors with a modest return on their capital, according to a second person who was briefed on the arrangement.