Microsoft hits Inflection point, peels off top personnel to form AI division

Microsoft CEO Satya Nadella announced the formation of a new AI division headed by Mustafa Suleyman and Karén Simonyan, two of the three founders of AI upstart Inflection.

Suleyman, who will serve as EVP and CEO of Microsoft AI, and Simonyan, who will be chief scientist, both worked previously at DeepMind as a co-founder and a researcher respectively. DeepMind was acquired by Google in 2014.

Nadella said Suleyman and Simonyan will focus on improving Microsoft Copilot and other AI-infused products like Bing and Edge, and on research.

"I’ve known Mustafa for several years and have greatly admired him as a founder of both DeepMind and Inflection, and as a visionary, product maker, and builder of pioneering teams that go after bold missions," said Nadella in a message shared with Microsoft employees and published online.

Suleyman's leadership at Google could have gone better. In 2021, the Wall Street Journal reported, "Mustafa Suleyman, co-founder of Google’s London-based artificial-intelligence arm, DeepMind, was stripped in late 2019 of most management responsibilities after complaints that he bullied staff, according to people familiar with the matter." And subsequent reporting in other publications detailed further allegations and an apology from Suleyman for a management style that "was not constructive."

"I took this feedback seriously and agreed to take some time out and start working with a coach," he added in his mea culpa. "These steps helped me reflect, grow and learn personally and professionally. I apologize unequivocally to those who were affected by my past behavior."

The Register asked Microsoft to comment on these claims. A spokesperson acknowledged receipt of our inquiry and has not responded further.

In a social media post, Margaret Mitchell, AI research and chief ethics scientist at Hugging Face, who worked previously at Google and Microsoft, expressed concern about Suleyman's appointment.

"My heart goes out to the women hurt by this person," Mitchell wrote. "[If I understand correctly], some of you are gagged [as a result of legal agreements], and this must seem like a slap in the face. He once yelled at me for having a PhD."

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Inflection – started in 2022 by Suleyman, Simonyan, and Reid Hoffman, the billionaire co-founder of Microsoft-acquired LinkedIn – named Sean White its new CEO on Tuesday, and wished its exiting leaders well. The AI startup neglected to mention that it might need to hire additional employees to replace the ones who are following the departing execs out the door.

As Nadella put it, "Several members of the Inflection team have chosen to join Mustafa and Karén at Microsoft."

By acquiring employees rather than the entire company, Microsoft may manage to avoid further regulatory entanglements while mitigating the risk of erratic behavior from partners. The US FTC is already looking into the Windows giant's relationship with OpenAI, which nearly went sideways last fall when OpenAI's board briefly ousted CEO Sam Altman before hiring him back – the desired outcome at Microsoft to protect its investment in the AI super-lab.

Nadella said that Mikhail Parakhin, CEO of advertising and web services at Microsoft, and his team, including those working on Copilot, Bing, and Edge, will report to Suleyman, as will Misha Bilenko, corporate veep of GenAI, and his team. Kevin Scott will remain CTO and exec veep of AI, and Rajesh Jha will continue as EVP of experiences and devices.

"At our core, we have always been a platform and partner-led company, and we’ll continue to bring that sensibility to all we do," said Nadella. "Our AI innovation continues to build on our most strategic and important partnership with OpenAI. We will continue to build AI infrastructure inclusive of custom systems and silicon work in support of OpenAI’s foundation model roadmap, and also innovate and build products on top of their foundation models. And today’s announcement further reinforces our partnership construct and principles."

As for revenue from AI, investors have been urged "to temper" their expectations. ®