Microsoft hired Inflection AI’s co-founder and most of its staff in March and agreed to pay $650 million as a license fee to resell the AI startup’s technology|Robert Scoble|CC BY 2.0
The Federal Trade Commission (FTC) is actively investigating whether Microsoft structured its $650 million deal with an artificial intelligence startup, Inflection AI, to avoid antitrust review, reports the Wall Street Journal.
What happened?
In March, Microsoft hired Inflection’s co-founder, Mustafa Suleyman (and most of its staff), and agreed to pay $650 million as a license fee that allows reselling of the AI startup’s technology.
The deal, not reported to federal antitrust authorities, might have been designed to dodge scrutiny, as companies must report acquisitions over $119 million. The tactic involves hiring talent without acquiring the entire company.
If deemed unreported, Microsoft could face fines and suspension of the agreement.
The FTC, led by Chair Lina Khan, is particularly focused on tech giants acquiring AI startups, fearing monopolistic control over advanced technologies.
In January, the FTC ordered major tech firms, including Microsoft, OpenAI, Nvidia, Alphabet, Amazon and Anthropic, to disclose information on recent AI investments and partnerships.