Daily Digest: Leaving $4B behind

PLUS: Early signs of GPT-5

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Hello folks, here’s what we have today;

PICKS

  1. Satya Nadella is out there, hedging his AI bets right, left and centre. The latest move from him is getting Inflections AI’s co-founder Mustafa Suleyman to join and head Microsoft’s new AI division.🍿Our Summary (also below)

    In brief, there are three key parts to this “sudden” change:

    • Microsoft is setting up a new division called Microsoft AI.

    • Suleyman and Chief Scientist Karén Simonyan, plus many researchers, are now at Microsoft AI.

    • Inflection has a new biz focus. Pi (its consumer chatbot) lives on but cash will come from licensing APIs like other AI labs.

  2. GPT-5 is materially better, that’s the word on the street based on an unnamed CEO who got to see it. Although not AGI, the next model is likely to be great at calling agents that can do work autonomously. Cool, cool, so when are we getting a peek, Sam?

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QUICK BITES

Satya Nadella is out there, hedging his AI bets right, left and centre. The latest move from him is getting Inflections AI’s co-founder Mustafa Suleyman to join and head Microsoft’s new AI division.

What is going on here?

Mustafa Suleyman joins Microsoft along with a significant talent from Inflection AI.

image via Bloomberg

What does this mean?

There are many moving parts to this “sudden” change. Three key ones are:

  • Microsoft AI Division: Microsoft is setting up a new division called Microsoft AI.

  • Inflection's talent shift: Suleyman and Chief Scientist Karén Simonyan, plus many researchers, are now at Microsoft AI.

  • Inflection's new focus: No more consumer chatbots; they'll license APIs (like other AI labs).

Let’s dive into the deets now. On Microsoft’s side, Mustafa Suleyman will now head all of Microsoft’s consumer AI efforts including Copilot, Bing and Edge. Karén Simonyan, also co-founder of Inflection AI will join Suleyman as Chief Scientist of Microsoft AI. A lot of InflectionAI’s researchers are joining them in this move.

On the other side, Inflection’s shifting gears too. Reid Hoffmann, the 3rd cofounder of Inflection AI will stay on the board and Sean White (prev. R&D Mozilla) will be its new CEO. They will keep running Pi, its personal AI chatbot, but shift the business focus away from chatbot to selling API access as an AI studio.

Look between the lines here: Inflection AI built a supercluster of 22k H100s but most of its AI talent is now on its way to Microsoft. 8 months back, it also raised at a supposedly $4B valuation (including big bucks from Microsoft). So, is this a rug pull on all that? It seems not as Reid Hoffman says this will be a good outcome for investors, likely through that API licensing to, hear me out…, Microsoft.

In clearer words, this is some hoopla jumping to avoid antitrust probes on the deal. Satya tried the same after Sam Altman and the OpenAI board’s drama. That one resulted in Sam being back at OpenAI but Satya was like, “Hit me baby one more time.”

Why should I care?

Inflection AI captured a significant consumer base on the back of their design for “personal AI”. Now, with Mustafa heading the consumer AI products for Microsoft, we can expect more personal AI chatbots from Microsoft as well, not just work copilots.

Bottom line: Don't bet against Satya's 4D chess.

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