In June 2023, Inflexion announced that it had raised $1.3 billion to build what it called “more personal AI.” The lead investor was Microsoft.
Today, less than a year later, Microsoft announced that it was essentially eating Inflection alive (though I think they worded it differently).
Co-founders Mustafa Suleiman and Karen Simonian are leaving for Microsoft, the former along with “several members” of the team, in Microsoft's words, or, in Bloomberg's words, “most of the staff.” , will lead the newly created Microsoft AI division. I'll report it. Reid Hoffman will stay on with new CEO Shaun White and try to salvage what's left of the company, which, again, raised $1.3 billion nine months ago and will be worth $200 million by mid-2022. Raised $25 million.
Inflection's thesis was a conversational AI that can have regular conversations across multiple platforms, remembers your previous conversations, and makes it more personal and useful. Great idea, but their AI, Pi, could never come close. That was fine, but even with that kind of money, the capabilities and services offered by OpenAI (which Microsoft is also hedging its bets on and backing) and Google's Gemini (which has a home-field advantage) are rapidly increasing. I couldn't keep up with the progress. search), and Anthropic (aimed at safe, boring applications that AI is good at).
Perhaps this pitch was doomed to fail. I'm not sure people want personalized AI when things are already comfortably within humanity's uncanny valley. They may not want their business writing expert AI, architectural sketching AI, or therapeutic chat AI to know each other at all. Integrating them is certainly an approach, but whether the market rejected it or Inflection's technology simply didn't meet its purpose, the Pi has always seemed like a fine dual player to us. It looked like.
Of course, this photo cost a lot of money to take, probably in the hundreds of millions of dollars, but I imagine the income was minimal in relative terms.
How long will you keep throwing money into the hole? When will it stop being a long game and become a waste of capital? (I'm not saying the effort is wasted, because the company has produced a lot of valuable research in this area, and the researchers are definitely proud of it.) And who would make such a judgment? Did you do that?
Whoever it is, what we have here is a “new change.” Except for the two technically substantial co-founders (sorry, Mr. Reed), and minus the product in which the company has invested a lot of money (“no immediate changes” to the Pi, basically a death warrant). ), one would imagine that some or most of the team that built it would be subtracted, and a large amount of money dependent on performance. Hoffman and White do the job they deserve.
A new focus on “AI studio businesses where custom-generated AI models are created, tested, and fine-tuned for commercial customers” probably would have been fine to focus on a year or two ago, but right now. Now it's time to fight over the crumbs.
And Microsoft.
What do you hear? Echo of the 90s? Hug me… stretch me… erase me…
Are they the good guys here, rescuing a valuable team from the wreckage that was in danger of collapsing along with the business? Or are they opportunists with the clear intention of backing multiple horses in the same race and gleefully gobbling up any horse that stumbles before the finish line?
So it wasn't until November that we saw them launch an onslaught against OpenAI. It's literally the exact same thing.
For a few hours, OpenAI became the fallen horse, and Sam Altman, Greg Brockman, and their supporters became the meat. In the end, Microsoft was able to gain a little more leverage over the company instead of eating it alive.
Now they have a second option and it's probably much cheaper. Inflection doesn't have the same momentum as OpenAI, which was probably at the peak of its ambitions at the time of the coup attempt. Let's see if Suleiman and Simonyan can effectively lead the new AI division. I don't know about you, but I would highly doubt their intuition after seeing a billion dollar company disappear so quickly. Would you hire them after doing something like this?
Whatever the circumstances behind this sudden plunge, it highlights the dominance of legacy technology companies in this space. Whether it's OpenAI or Inflection, Microsoft gives them cash and computing addictions, whispers partnerships in their ears, and the moment they stumble, out comes the hidden fork and knife. Do you think Google isn't ready to do the same for Anthropic? Do you think Apple wouldn't do the same if they could?
As always in the tech industry, those who can, build. If you can't buy it, please buy it by any means possible.