Inflection AI is perhaps one of the better examples of aspiring artificial intelligence (AI) startups that are aiming to become a dominant force in its own right or be integrated or
. Founded in 2022 by a trio of entrepreneurs – Reid Hoffman, Mustafa Suleyman, and Karén Simonyan, each of which has experience with startups and AI companies. Raising 1.3 billion U.S. dollars in funding in 2023, most of which came from tech giant Microsoft, the company has also partnered with Nvidia, the darling on the AI revolution, to develop
.
Pi was interesting but made no waves
Inflections' main AI project, a generative AI bot named Pi, was released in 2023 and while it gained some interest as a chatbot, it did not come near to the technical capabilities and benchmarks of the larger competitors such as
ChatGPT and
Gemini. Pi's goal was to provide emotional support for human users, being capable of text or voice-based dialogue with human users in a kind and diplomatic tone. This made the program unique, compared to the more matter-of-fact responses from ChatGPT and Gemini, for example. Ultimately, Inflection’s development of Pi was drastically restrained by the immense funding requirements needed for generative AI model development.
From funding to being fed on
Microsoft is Inflection’s largest funder, creating an important link between the two companies. In March 2024, two of the main founders at Inflection left the company to join Microsoft and start Microsoft AI. They took with them most of the staff, leaving only a small number to continue work on Pi. The Federal Trade Commission (FTC) has made inquiries into this transfer of staff, citing investor interests but also due to this level of staff transfer nearly equating to an acquisition by Microsoft of the company. Investigations were still ongoing as of June 2024. This cannibalization of the company by Microsoft is comparable to the unusual relationship that Microsoft has with
OpenAI, another prominent AI startup.
Uncertain future
With the departure of most of its staff and its founders, the future looks bleak for any continuing development at Inflection. It is highly unlikely that investors are willing to pool more money into the enterprise, given that its staff can be poached by any major tech giant. That, coupled with the lack of any appreciable return on investment for most funders, makes Inflection both a cautionary tale for investors and an example of the many ways AI firms are absorbed and operated in the ongoing AI revolution.
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