Microsoft’s Inflection deal gets a closer look

The UK’s antitrust regulator is scrutinizing Microsoft’s unique relationship with Inflection AI. The PC giant did what some have called an “acqui-hire” — not buying the company outright, but rather hiring many of its former leaders and employees instead.

Microsoft poached the once-$4 billion startup’s co-founders Mustafa Suleyman and Karén Simonyan as well as “most of its staff.” It paid $650 million to license Inflection’s technology, which is how investors will get their returns. Now, the UK’s Competition and Markets Authority is looking at whether the deal is a “de facto merger,” a decision it’s expected to make by Sept. 11.

Microsoft is already facing scrutiny for its $13 billion investment in OpenAI in the US and UK, choosing to relinquish its non-voting board seat to stave off further criticism last week. We’re watching for how Microsoft fares in court, and whether it changes its tack in competing for the top talent and tech in AI development.