10:11 AM EDT, 06/06/2024 (MT Newswires) -- (Updates with Microsoft's ( MSFT ) response in the fifth paragraph.)

Microsoft ( MSFT ) is under investigation by the Federal Trade Commission to determine whether the technology giant structured its licensing deal with the artificial intelligence startup Inflection AI to circumvent a government antitrust review of the transaction, The Wall Street Journal reported Thursday, citing a person familiar with the matter and records of the deal.

In March, Microsoft ( MSFT ) reached a $650 million licensing deal with Inflection to resell the startup's technology.

The source said the regulator wants to determine whether Microsoft ( MSFT ) structured the deal to give the company control of Inflection without a government review.

The report said the FTC sent subpoenas to Microsoft ( MSFT ) and Inflection, seeking information including documents going back about two years.

"Our agreements with Inflection gave us the opportunity to recruit individuals at Inflection AI and build a team capable of accelerating Microsoft Copilot, while enabling Inflection to continue pursuing its independent business and ambition as an AI studio," a Microsoft ( MSFT ) spokesperson told MT Newswires in an e-mailed statement. "We take our legal obligations to report transactions under the HSR Act seriously and are confident that we have complied with those obligations."

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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