FTC Investigates Microsoft's Inflection AI Acquisition
The Federal Trade Commission (FTC) is investigating Microsoft's recent $650 million deal with AI startup Inflection AI to determine whether it was structured to avoid antitrust scrutiny. The deal involved Microsoft licensing Inflection's AI models and hiring almost all of the startup's employees, without acquiring any equity or intellectual property. The FTC has issued subpoenas to both companies, seeking documents from the past two years to understand the negotiation and structure of the agreement.
The investigation focuses on whether Microsoft should have reported the deal for an antitrust review, given the potential implications for competition in the AI sector. The Department of Justice is also examining similar "acqui-hire" deals within the technology industry. If the FTC finds that Microsoft bypassed regulatory requirements, it could take enforcement actions, including fines or suspending the deal while a comprehensive review is conducted. Inflection's COO, Ted Shelton, emphasized that Microsoft has no investment in the startup and that Inflection remains independent.
