Pete Huang

One of the FTC inquiries this week is in the way Microsoft did one of its deals earlier this year.

Now, as background, there was a startup called Inflection AI co-founded by two big personalities in tech.

One is Reid Hoffman, who co-founded LinkedIn, and one is Mustafa Suleiman, who co-founded DeepMind, which is now Google's main AI lab.

Now, Inflection AI was a weird company.

They had a ton of money because of the reputation and access of the people starting the company.

They bought a ton of GPUs and they built really good AI models.

But it wasn't clear how they would actually turn this into a business.

They were making this product called Pi, which is a chatbot that was billed as the most human, the most empathic chatbot.

but they didn't charge for it.

And there wasn't really a clear business plan underway.

And after a long enough time, people started going, okay, well, what are they actually doing here?

So come March of this year, there's an announcement.

Microsoft is paying Inflection $650 million for the ability to sell Inflection's tech.

Oh, and by the way, Inflection's CEO is also now a part of Microsoft.

99% of Inflection's staff have received job offers to join Microsoft, and they've all virtually taken them.

But they never say the word acquisition.

It's not an acquisition.

The legal entities are still separate.

There's no change in ownership.

And technically speaking, today, there is still an Inflection AI as a standalone company.