On May 14, according to foreign media reports, sources revealed that Microsoft (MSFT.O) is seeking to acquire an artificial intelligence startup in preparation to reduce its reliance on its once-critical partner, OpenAI. The potential acquisition would help Microsoft build up its AI talent and advance its previously stated goal of developing an advanced AI model by next year. Sources indicated that earlier this spring, Microsoft considered acquiring the code generation startup Cursor, but ultimately abandoned the plan due to internal assessments suggesting that the deal would face regulatory scrutiny because of Microsoft's ownership of GitHub Copilot. Microsoft is currently in negotiations with Inception, a small startup founded by a team from Stanford University, which focuses on developing large language models using a technology called 'diffusion.' Microsoft's venture capital fund M12 participated in Inception's $50 million seed round financing at the end of 2025. Microsoft also faces strong competition from other tech giants in the bidding, particularly SpaceX, which is owned by Elon Musk. Sources noted that SpaceX has also approached Inception.