The Wall Street Journal reported on Wednesday that the U.S. Federal Trade Commission is investigating whether Microsoft used its recent deal with the AI startup Inflection to circumvent government antitrust scrutiny.
In March of this year, Microsoft hired Mustafa Suleyman and Karén Simonyan, co-founders of Inflection, along with most of their team, to work on the tech giant's internal AI development projects, including the creation of products like Copilot.
As part of the agreement, Microsoft agreed to pay Inflection $650 million for the rights to use the startup's flagship AI models, which are now available on the Azure marketplace.
Over the past year, Inflection has emerged in the rapidly growing AI sector, raising over $1.3 billion in a funding round led by Microsoft and NVIDIA. The company developed a chatbot named Pi, which competes with OpenAI's ChatGPT.
Following the agreement with Microsoft, Inflection, under its new CEO, expressed its commitment to developing AI models for enterprise applications.
Microsoft's deal has sparked some controversy, with critics pointing out that the tech giant essentially poached most of Inflection's talent.
Additionally, Microsoft has already been under scrutiny by the Federal Trade Commission for its other activities in the AI space, particularly its relationship with OpenAI.
