one year on
Microsoft hires Mustafa Suleyman to lead new consumer AI division, bringing over most of Inflection's staff
Microsoft forms a new 'Microsoft AI' unit led by DeepMind and Inflection co-founder Mustafa Suleyman, bringing the teams behind Copilot, Bing and Edge, along with most of Inflection's roughly 70 employees, in a deal that leaves Inflection focused on licensing its API to businesses.
Microsoft today announced that Mustafa Suleyman, co-founder of DeepMind and Inflection AI, will join the company to lead a new organization called Microsoft AI. The division will oversee Copilot, Bing, Edge, and other consumer AI products, with Suleyman reporting directly to CEO Satya Nadella as an Executive Vice President. Inflection co-founder and chief scientist Karén Simonyan will also join as Chief Scientist under Suleyman.
The move effectively constitutes a reverse-acquihire: most of Inflection’s roughly 70 employees are expected to follow Suleyman to Microsoft, leaving Inflection focused on licensing its API to businesses. Microsoft is not acquiring Inflection’s equity or intellectual property, but Forbes reports a financial arrangement tied to the API license may make investors whole on their committed capital over time. Inflection has appointed former Mozilla chief research officer Sean White as CEO to lead the pivot to enterprise.
The deal raises immediate questions about the viability of the consumer AI arms race. Inflection had raised $1.3 billion just last year to challenge OpenAI’s ChatGPT with its chatbot Pi, which reportedly had millions of weekly users but struggled to find a business model. Industry observers note that such ‘semi-exits’ may proliferate if antitrust hurdles prevent traditional acquisitions. For Microsoft, the hire strengthens its consumer AI bench while maintaining its key partnership with OpenAI.
The record
Announced Suleyman's appointment as EVP and CEO of Microsoft AI, reporting to Nadella, to advance Copilot and consumer AI products.
In a Bloomberg interview, said Pi had reached one million daily users but acknowledged the lack of an effective business model.
Wrote on LinkedIn that the agreement with Microsoft means all Inflection investors will have a good outcome, with anticipated good future upside.
Commenting that it is a good day for Mustafa but a bad day for Inflection's investors and early employees, and that bizarre semi-exits may become more common if antitrust regulators block M&A.
One year later — open only if you can handle spoilers
The unusual deal structure drew antitrust scrutiny globally, with regulators questioning whether it circumvented merger filing requirements. Inflection's API licensing business failed to gain traction, and the company was effectively wound down within two years. Suleyman's Microsoft AI unit struggled to differentiate Copilot from OpenAI's offerings amid internal tensions.