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Microsoft<\/a> Corp. has named Mustafa Suleyman<\/a> head of its consumer artificial intelligence business,\u00a0hiring most of the staff from his Inflection AI\u00a0startup as the software giant seeks to fend off Alphabet Inc.\u2019s Google<\/a> in the fiercely contested market for AI products.<\/p>\n Suleyman, who co-founded Google\u2019s DeepMind<\/a>,\u00a0will report to Chief Executive Officer Satya Nadella and oversee a range of projects, such as integrating\u00a0an AI Copilot into Windows and adding conversational elements to the Bing search engine. His hiring will\u00a0put\u00a0Microsoft\u2019s consumer AI work under one leader for the first time.<\/p>\n Inflection, a rival of Microsoft\u2019s key AI partner OpenAI,\u00a0is exiting its Pi consumer chatbot effort and shifting to\u00a0selling AI software to businesses. Kar\u00e9n Simonyan, \u00a0Inflection\u2019s co-founder,\u00a0will join Microsoft as\u00a0chief scientist for the new consumer AI group.\u00a0<\/p>\n In the past year, Nadella has been revamping his company\u2019s major products around artificial intelligence technology from OpenAI. Under the Copilot brand, Microsoft has blended an AI assistant into products including Windows, consumer and enterprise Office software, Bing and security tools.\u00a0With Google and others trying to catch up, Nadella\u2019s multibillion-dollar investment in OpenAI has given Microsoft a\u00a0first-mover advantage<\/a>. And yet, 13 months after unveiling an AI-enhanced Bing search, the company has made few gains<\/a>\u00a0in that market, which remains dominated by Google.<\/p>\n \u201cWe want to make sure that this next wave is one that for the consumer Microsoft can really, really create incredible products,\u201d Suleyman said in an interview.<\/p>\n The new hires also mark another significant step by Microsoft to bolster its in-house\u00a0AI capabilities and products, outside of the relationship with OpenAI. Last month, Microsoft invested $16 million in Mistral AI, a French rival to OpenAI. Nadella on Monday told OpenAI CEO Sam Altman about Suleyman and his team joining Microsoft, the company said.<\/p>\n \u201cWe congratulate Mustafa and Kar\u00e9n on their new roles and look forward to working with them,\u201d an OpenAI\u00a0spokesperson said in a statement. \u201cOur partnership with Microsoft is grounded in leveraging Azure supercomputer infrastructure built for OpenAI to power our research and train our next-generation models\u2014a core part of our mission. We will also continue developing useful AI products like ChatGPT aimed at widely distributing the benefits of AI and driving industry-wide innovation for everyone.\u201d<\/p>\n Nadella said Microsoft is \u201cvery committed\u201d to its partnership with OpenAI.\u00a0Microsoft will continue to provide the startup with the cloud-computing power to build\u00a0its AI models and will use those in its software. Suleyman will be tasked with\u00a0forming them into compelling, well-designed products for consumers. \u201cWe have in the world a number of cutting-edge pre-trained models,\u201d Suleyman said. \u201cThe real challenge we have is turning those models into actual products today.\u201d<\/p>\n Inflection in June raised $1.3 billion in one of the largest funding rounds of Silicon Valley\u2019s AI frenzy. That round valued the\u00a0startup\u00a0at $4 billion, a person familiar with the matter said at the time. Microsoft board member Reid Hoffman is a co-founder of the two-year-old startup, alongside Suleyman and Simonyan, and other investors include\u00a0Microsoft co-founder\u00a0Bill Gates, former Google CEO\u00a0Eric Schmidt\u00a0and\u00a0Nvidia<\/a> Corp.<\/p>\n In recent months, Inflection had talks with multiple investors\u00a0about raising additional funds, according to people familiar with the conversations. The company declined to comment.<\/p>\n Google, after falling behind Microsoft in the generative AI race, is starting to catch up. In February, the company rolled out Gemini<\/a>, its answer to OpenAI\u2019s ChatGPT. The rollout hasn\u2019t gone perfectly. Google pulled a tool designed to generate\u00a0realistic-looking images of people after a flurry of criticism that its depictions of race were historically inaccurate. But earlier this week, Bloomberg reported\u00a0\u00a0that the company was in talks to license Gemini to\u00a0Apple<\/a> Inc. for new iPhone features expected later this year.\u00a0A deal with Apple would be Google\u2019s highest-profile partnership for Gemini to date, building on the two companies\u2019 relationship around search and making it harder for Microsoft to make gains on smartphones.<\/p>\n Inflection\u2019s Pi chatbot was designed<\/a>\u00a0to mimic human understanding of\u00a0emotions and interact with users in a supportive fashion. While attracting considerable investor interest, including from Microsoft, and a million active daily users, the startup has not succeeded in finding an effective business model, Suleyman said. In the meantime, Nadella asked him to move over to Microsoft.\u00a0<\/p>\n \u201cWe want to bring real competition,\u201d Nadella said in the interview. \u201cThe thing that\u2019s beautiful is when the medium changes, it means we get to play again to say, what\u2019s the browser mean? What does even the operating system mean? What is an assistant? And so that\u2019s the exciting part\u2014not what happened but what is going to happen\u2014it\u2019s the rebirth of personal computing.\u201d\u00a0<\/p>\n Microsoft\u2019s consumer AI products have had their own issues.\u00a0The Bing chat initially got disturbingly personal with some users, forcing the company to temporarily cut conversations short. Users in February reported\u00a0<\/a>Copilot was generating responses that were called bizarre, disturbing and, in some cases, harmful. Microsoft said users deliberately manipulated Copilot to generate some of those responses. This month, a company engineer sent letters to the board, lawmakers and the Federal Trade Commission warning that Microsoft wasn\u2019t doing enough to safeguard its AI image generation tool\u00a0from creating abusive and violent content.<\/p>\n The work Inflection has done on tone, as well as the new hires\u2019 experience in training AI software after it has initially been developed, will be critical here, Nadella said. \u201cOne of the key insights that Pi exemplifies is that pre-training is super-important and necessary but not sufficient,\u201d he said. \u201cAll of us in AI, at least when it comes to product-making, are realizing that the post-training step may be everything.\u201d\u00a0<\/p>\n DeepMind<\/a> was founded in 2010 and acquired four years later by Google. Suleyman was a key public face for the company, speaking to officials and at events about the promise of AI and the ethical guardrails needed around the technology.<\/p>\n However, DeepMind was heavily criticized for its work in the UK\u00a0health sector. Its first health product was an app called Streams that was originally designed to help doctors identify patients at risk of developing acute kidney injury. In July 2017, the UK\u2019s data privacy watchdog said DeepMind\u2019s partner in the project, London\u2019s Royal Free Hospital, illegally gave the company access to 1.6 million patient records. Suleyman apologized in a statement at the time.<\/p>\n DeepMind workers complained about his management style, the Financial Times reported. Addressing the complaints at the time, Suleyman\u00a0said: \u201cI really screwed up. I was very demanding and pretty relentless.\u201d He added that he set \u201cpretty unreasonable expectations\u201d that led to \u201ca very rough environment for some people. I remain very sorry about the impact that caused people and the hurt that people felt there.\u201d<\/p>\n\n