Microsoft Acqui-Hires Inflection in Panic Deal, Impact on OpenAI Partnership Questioned

Microsoft has made a significant move by acqui-hiring Inflection AI, initially seen as a direct competitor to OpenAI. This acquisition, described by some as a panic deal, was completed in approximately three months, a timeline that includes initial outreach, term sheet negotiation, board consent, shareholder consent, management and team compensation, and IP agreements. The deal, which Microsoft pursued to de-risk, has raised questions about Microsoft's future relationship with OpenAI, as Inflection's team is expected to focus on training their own large language models (LLMs), potentially leading to a shift in Microsoft's allocation of compute resources between its internal teams and OpenAI. Observers suggest that OpenAI may need to diversify its partnerships beyond Microsoft in the coming months.