Tech titan Microsoft (NASDAQ:MSFT) has agreed to pay $650 million to Inflection AI, a startup developing Artificial Intelligence (AI) software and apps. The company will pay $620 million to license the startup’s AI models. Further, it will shell out $30 million for waiving any legal claims related to the mass recruitment of Inflection’s employees, Bloomberg reported.
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MSFT’s decision to onboard most of Inflection AI’s employees has caught market attention. Microsoft’s move reflects the process of acquiring a company primarily to recruit its employees. While Microsoft is absorbing most of Inflection AI’s employees, it is not acquiring the entire company.
On March 19, MSFT announced that it hired Mustafa Suleyman and Karen Simonyan, the co-founders of Inflection AI, to spearhead a newly formed division within Microsoft called Microsoft AI. The new company will focus on advancing Copilot, MSFT’s AI tool, and other consumer AI products. Additionally, Microsoft disclosed that numerous members of the Inflection team have opted to join the company.
What is the Prediction for Microsoft Stock?
Microsoft stock has gained about 59% in one year as investors cheered the company’s aggressive investments in AI technology and its integration into its product offerings. Thanks to this rally, MSFT surpassed Apple (NASDAQ:AAPL) to be the world’s most valuable company.
MSFT stock has 31 Buy, one Hold, and one Sell recommendations, translating into a Strong Buy consensus rating. Analysts’ average price target on MSFT stock is $470.30, implying a 9.53% upside potential from current levels.
