Reid Hoffman—Co-founded Inflection AI while serving on Microsoft board, creating conflict of interest in acqui-hire deal
Reid Hoffman co-founded Inflection AI in 2022 while simultaneously serving as a Microsoft board director. When Microsoft hired most of Inflection's staff and paid approximately $650 million in licensing fees in March 2024, Hoffman's dual role raised significant conflict of interest concerns. The FTC investigated the deal as a potentially illegal acqui-hire. Hoffman promised all Inflection investors would have a 'good outcome.' He left the Microsoft board in March 2023 but remained a co-founder of Inflection.
Scoring Impact
| Topic | Direction | Relevance | Contribution |
|---|---|---|---|
| Antitrust & Competition | -against | secondary | -0.50 |
| Corporate Governance | -against | primary | -1.00 |
| Overall incident score = | -0.643 | ||
Score = avg(topic contributions) × significance (high ×1.5) × confidence (0.57)
Evidence (1 signal)
Fortune reported on Hoffman's dual role as Inflection co-founder and Microsoft board member
Fortune reported that Reid Hoffman, a co-founder of Inflection AI and a Microsoft board director, had potential conflicts because of AI startups backed by his VC firm Greylock. When Microsoft hired most of Inflection's staff, Hoffman promised 'all of Inflection's investors will have a good outcome today.' Microsoft paid approximately $650 million: $620 million in non-exclusive licensing fees and $30 million for Inflection to agree not to sue.