This post is by Om Malik from On my Om

Microsoft has hired a big chunk of the team that started Inflection, an AI startup developing large language models. They will lead Microsoft AI, a new division within the company that consolidates its consumer AI initiatives with Copilot, Bing, and Edge. DeepMind co-founder Mustafa Suleyman, who co-founded the company alongside Karén Simonyan, and LinkedIn co-founder Reid Hoffman, are coming on board at Microsoft as the leader of the division. Simonyan is also joining the team.

Inflection, itself, was going to change directions and focus on helping businesses on their AI journey under a new CEO, Sean White. It also noted it “will now host Inflection-2.5 on Microsoft Azure helping us get it into the hands of creators everywhere.” You might think that this is business as usual. But look closer, and you might think otherwise. Hoffman wrote on LinkedIn that “this agreement with Microsoft means that all of Inflection’s investors will have a good outcome today, and I anticipate good future upside.” In announcing the deal, this language is unusual — considering there were no specifics mentioned in either Microsoft or Inflection press releases. Later, The Information reported that Microsoft was paying Inflection “$650 million” in a deal that would allow it to license the company’s models to be sold on Azure. This is an unusually large price to pay for a model that has marginal traction in the market place — its chatbot Pi barely got 2 million monthly active users. It has little or no developer traction. Ask (Read more…)