Microsoft-backed Inflection Arranges Unusual Payout for Startup’s Investors

Microsoft’s decision to hire most of the staff of Inflection AI, including co-founders Mustafa Suleyman and Karén Simonyan, leaves the would-be OpenAI rival a shell of its former self. But Inflection has arranged an unusual deal for investors that should take the sting out of that blow.

At the same time it revealed the staff departures, Inflection disclosed a licensing deal with Microsoft to make its models available for sale on Microsoft’s Azure, and said other cloud platforms would follow. It has also told investors they will fully recoup their investment, and more, as a result of the licensing agreement, according to a person briefed on the arrangement. Inflection has raised over $1.5 billion from investors including Microsoft and Greylock.