Dominating the AI empire, is Microsoft the strongest PE in the tech industry?

Microsoft is vying for dominance in the AI field and avoiding antitrust scrutiny through a "non-acquisition acquisition" model.

According to a previous report by Wall Street News, Microsoft announced this week that it has hired the core team of AI basic model company Inflection.

It is reported that the co-founders of the startup star Inflection, Mustafa Suleyman and Karén Simonyan, will leave the company to join Microsoft to form a new team called "Microsoft AI," integrating Microsoft's consumer AI work with products such as Copilot, Bing, and Edge.

Reports suggest that the actual extent may be more than this.

According to Bloomberg, Microsoft actually "hired most of Inflection's employees," which is almost equivalent to acquiring this unicorn company. Additionally, after being "poached collectively" by Microsoft, the remaining employees of the AI unicorn Inflection will receive a $650 million investment from Microsoft.

Is the "non-acquisition acquisition" a model for tech giants' expansion?

In fact, this is not the first time Microsoft has invested in "acquiring" AI startups, with OpenAI being a precedent.

It is reported that after establishing a partnership with OpenAI, Microsoft has injected approximately $10 billion into OpenAI and holds 49% of the company's shares.

OpenAI is actually regulated by a non-profit organization, and Microsoft has gained important intellectual property and innovation capabilities through this investment method.

Previously, when OpenAI CEO Altman was briefly dismissed in the "palace struggle," he led co-founder Greg Brockman and other colleagues to join the Microsoft camp to "lead a new advanced artificial intelligence research team."

Microsoft CEO Nadella also stated that if things go wrong, he can firmly control everything about OpenAI, indicating the company's actual control over OpenAI. He said:

"We have all the intellectual property and capabilities. If OpenAI disappears tomorrow, to be honest, I don't want any of our customers to worry about it because we have all the rights to continue to innovate. Not only to serve products, but we can also do what we do in collaboration."

Some analysts point out that Microsoft has pioneered a "non-acquisition acquisition" model, allowing Microsoft to share the creativity and technology of startup tech companies while avoiding potential antitrust scrutiny. Despite facing scrutiny from the Federal Trade Commission (FTC) for the "Microsoft+OpenAI" collaboration model, in an increasingly tightening regulatory environment, Microsoft's investment model may provide a new approach for other tech giants to deal with.

Investor Gavin Baker wrote:

"If the deal between Microsoft and Inflection goes through, it will set a precedent for every major tech company to make acquisitions."