Microsoft is making significant strides in AI initiatives. On Tuesday, 19th March 2024, Microsoft CEO Satya Nadella announced the hiring of Mustafa Suleyman, the CEO of Inflection. Along with him, Karén Simonyan, the co-founder of Inflection, will also join Microsoft as the chief scientist for the new consumer AI group.

Microsoft has now invested in and collaborated with OpenAI, Mistral, and Inflection. It has access to at least six of the best brains in the AI business with proven track records. Microsoft shall celebrate three AI marriages. Managing inter-partner relationships and competition on similar offerings shall be a management challenge.

Mustafa will lead a new division focusing on consumer-facing AI applications. Mustafa will be joined by Inflection’s 70 staff members. His primary responsibility will be to grow products such as Microsoft’s Copilot assistant and Bing search engine. While Microsoft has become a leader in the enterprise generative AI market, with its Copilot AI assistants embedded in its suite of workplace applications such as MS Office, it has been slower to release products aimed at the mass market. The AI-enhanced Bing search engine was expected to disrupt the internet search market, but it continues to be dominated by Google.

Microsoft can now offer various products, including mass-market consumer offerings, enterprise offerings, and large-scale LLMs for governments. With this new development, Microsoft has created a strong presence in the AI space that surpasses that of Google, Meta, and other competitors.

Mustafa co-founded DeepMind, in the UK in 2011. DeepMind created various AI systems, including AlphaGo, which beat the world champion of the Korean strategy board game Go in 2017. Another product, AlphaFold, predicts protein structures, potentially revolutionizing drug discovery and protein engineering.

DeepMind was acquired by Alphabet in 2014 and works as an independent subsidiary collaborating on Google’s AI initiatives.

Mustafa left Google in January 2022 as the Vice President of AI Product Management and AI Policy.

In early 2022, Mustafa, Reid Hoffman, and Karén Simonyan founded Inflection AI. Inflection AI raised $1.3 billion in funding from various investors, including Microsoft, NVIDIA, and several Silicon Valley entrepreneurs and venture capital firms. Notable investors include Bill Gates, Eric Schmidt, and Reid Hoffman. This funding round valued Inflection AI at $4 billion.

Inflection plans to focus on selling AI software to businesses while maintaining its Pi consumer chatbot business. Inflection Pi has a million active daily users, but the startup could not find a sustainable business model.

Microsoft and Inflection have stated that Inflection continues to remain an independent company. Reid Hoffman claimed that everyone involved in Inflection AI would see a good future upside.

Microsoft also struck a deal with Paris-based Mistral in March 2024 and unveiled a “multiyear partnership.”  The partnership includes a research and development collaboration to build applications for governments across Europe and use these AI models to address public sector-specific needs. Mistral secured a €2bn valuation in December 2023 in a funding round worth roughly €400mn. Microsoft has invested $16 million in Mistral AI.

Mistral was founded by Mensch, Timothée Lacroix, and Guillaume Lample—former Meta and Google researchers—and innovators in building AI on the Azure cloud computing platform. Mistral’s models are “open source”. Mistral-Medium and Mistral-Large LLMs designed to rival OpenAI’s GPT-3 and GPT-4. Their AI models support multiple languages, including English, French, German, Spanish, and Italian.

Bloomberg reports that Apple is discussing with Google the possibility of licensing Google’s Gemini AI engine for future iPhone models. This could lead to integrating advanced AI features in upcoming iPhones, such as improving Siri’s capabilities.

For Apple, this could be a Faustian deal.

It would indicate that Apple is substantially behind in its AI initiative, “ Ajax. “

Apple’s credibility in developing new technologies, especially AI, will take a hit.

Apple will be seen more as a hardware company getting software company valuations.

Google’s Android is the largest player in the smartphone OS market and competes with Apple iOS head. Embedding Gemini into iOS would open Apple up to Google.

Google Gemini already powers the Samsung Ultra Smart Phone offering, Apple may not release anything significantly different.

Google Gemini will get access to iPhone and iPad users, who account for more than 50% of Apple’s revenues. Apple sold 230 million iPhones in 2023 alone.

While Microsoft can celebrate three weddings ( OpenAI, Inflection, and Mistral), the Apple-Google Gemini licensing deal will resemble an AI funeral for Apple.