The transaction is mostly in the form of a licensing deal that makes Inflection's models available for sale on Microsoft's Azure cloud service, the person said.
Inflection is using the licensing fee to provide some investors, including Greylock and Dragoneer Investment Group, one-and-half times of return, the source added.
Suleyman will be CEO of the unit, while Simonyan will join as chief scientist.
The news about the deal was reported earlier in the day by the Information.
Microsoft declined to comment, while Inflection AI did not immediately respond to a Reuters request for comment.
Inflection AI has emerged as one of the most high-flying names in the GenAI race after raising $1.3 billion from Microsoft and Nvidia (NVDA.O) in a mix of cash and cloud credit at a valuation of $4 billion in June.
