Two sources said good fortune Adept has received and signed a term sheet from Microsoft for the deal, although the financial value of the deal was not disclosed. According to one of the sources, the deal will not be a standard acquisition, but it will include some of the specialist team moving to Microsoft. This would be similar to Microsoft's controversial deal with Inflection AI earlier this year.
The Expert deal marks the latest move by Microsoft to transform itself into an AI powerhouse. Microsoft has invested $13 billion in OpenAI, the maker of ChatGPT, and has made smaller investments in several other startups, including France's Mistral.
Adept was founded in 2022 by OpenAI and Google veterans, including several co-authors of a popular 2017 research paper that created this type of neural network architecture, called Transformer. On which much of the generative AI boom is built.
While Adept debuted a shiny demo of its product in 2022, it struggled to get large commercial customers for its software. In late 2022, two expert co-founders, Ashish Vaswani and Niki Parmar, left to launch their startup, Essential AI, which pursues a similar idea of using transformers to create AI agents as a business. It will be useful. In May, The Information reported that Adept was exploring potential sales or strategic partnerships with companies including Meta.
Expert was founded on the idea of using transformers—but not to generate text, as is the case with the large language models (LLMs) that underlie consumer chatbots such as OpenAI's ChatGPT. Instead, the specialist plans to use Transformers to create AI assistants for businesses, which can automate any workflow and use any business software to perform tasks. This can range from extracting data from documents and putting them into a spreadsheet, to running financial data analysis and creating charts and graphs, and then creating a PowerPoint sales deck based on the analysis.
Expert, like Inflection, is backed by Silicon Valley VC firm Greylock Partners. Both startups also received investment from Microsoft. As of March 2023 Forbes The report, citing anonymous sources, valued Adept at “at least” $1 billion after it raised $350 million in its Series B round from General Catalyst and Spark Capital.
If Microsoft uses a similar deal structure with Adept that it used for Inflection, it could prove controversial. Microsoft hired Inflection's cofounder and CEO Mustafa Suleiman in March, along with most of its research scientists and AI engineers, but did not formally acquire the company. Instead, it paid Inflection's investors a $650 million fee to license the right to Inflection's technology. It did so even though Microsoft said it had little interest in products made by Inflection. A Microsoft spokesman said at the time that the payment was necessary to satisfy Inflection's investors and to prevent any lawsuits on the basis that employees who joined Microsoft somehow stole Inflection's trade secrets. had been. Microsoft refuted critics who said the structure had another purpose — to avoid the deal being blocked by antitrust regulators.
The US Federal Trade Commission has opened an investigation into the Microsoft Inflection Deal. But the UK Competition Authority decided after an initial investigation that it could not take any action against Microsoft for the deal because it was not structured as a traditional acquisition.