Microsoft is pushing to acquire AI startups, Reuters reported on May 13.

Reuters cited five sources familiar with the matter as saying the effort is part of preparations for an independent path that does not rely on longtime partner OpenAI.

Microsoft aims to secure AI talent through the acquisitions and develop its own state-of-the-art AI models by next year, the report said.

Microsoft reviewed a potential acquisition of AI coding startup Cursor this spring, but dropped the plan due to internal concerns that it would be hard to pass regulatory scrutiny while it has GitHub Copilot.

Microsoft is now in acquisition talks with Inception, a small startup founded by a Stanford University team, the report said.

Inception was founded in mid-2024 and focuses on developing large language models in a different way.

Inception develops models by applying diffusion techniques mainly used for AI image and video generation to text generation.

Unlike existing models that generate tokens sequentially one by one, diffusion generates and refines multiple tokens at once, which can significantly increase speed. Reuters reported that AI researchers say diffusion is hard to predict and it remains unclear whether it can be applied to very large models.

The talks are continuing and it is unclear whether they will lead to a deal, Reuters reported.