Microsoft Eyes AI Startup Deals as It Plans Beyond OpenAI Partnership

Microsoft is pursuing artificial intelligence startup deals as it prepares for a more independent future from OpenAI, Reuters reported May 13, citing five people familiar with the matter. The potential acquisitions are aimed at adding AI talent and helping Microsoft build a cutting-edge AI model by 2027. Microsoft considered acquiring code-generation startup Cursor in spring 2026 but dropped the idea over regulatory concerns tied to its ownership of GitHub Copilot. The company is also in talks with Inception, a Stanford-linked AI startup founded in 2024 that is exploring diffusion-based language models. Inception is seeking a valuation above $1 billion, according to one person familiar with the matter. Microsoft has committed $13 billion to OpenAI and had provided $11.8 billion as of an April 29 securities filing. A Microsoft executive testified May 13 that the company has spent more than $100 billion on OpenAI investments, infrastructure and hosting costs. Microsoft and OpenAI amended their agreement in late April, allowing OpenAI to build some products with rivals including Amazon.