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After raising $1.3B, Inflection got eaten alive by its biggest investor, Microsoft | TechCrunch

Mar 19, 2024 - techcrunch.com
In June 2023, AI company Inflection raised $1.3 billion to develop a more personalized AI, with Microsoft as the lead investor. However, less than a year later, Microsoft has taken over Inflection, with co-founders Mustafa Suleyman and Karén Simonyan, along with several team members, moving to Microsoft to head up a new AI division. Inflection's remaining team, led by new CEO Sean White, will attempt to salvage the company, which had also raised $225 million in mid-2022.

Inflection's main project was a conversational AI named Pi, which was designed to remember users and previous conversations. Despite significant investment, Pi struggled to compete with other AI offerings from OpenAI, Google, and Anthropic. The company's new focus will be on an "AI studio business," creating custom AI models for commercial customers. The article questions whether Microsoft is acting as a rescuer or opportunist, noting its similar approach with OpenAI, and highlights the power of legacy tech companies in the AI space.

Key takeaways:

  • Microsoft has taken over AI company Inflection, with co-founders Mustafa Suleyman and Karén Simonyan moving to Microsoft to head up a new AI division.
  • Inflection, which raised $1.3 billion in funding, had aimed to create a more personal, conversational AI, but struggled to compete with the likes of OpenAI, Google’s Gemini, and Anthropic.
  • The remaining Inflection team, led by Reid Hoffman and new CEO Sean White, will focus on an 'AI studio business' for commercial customers.
  • The article suggests that large tech companies like Microsoft, Google, and Apple are ready to swoop in and acquire smaller AI companies that struggle, highlighting the dominance of legacy tech companies in the AI space.
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