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Inflection's implosion and ChatGPT's stall reveal AI's consumer problem

Mar 20, 2024 - businessinsider.com
Tech investor Garry Tan's concerns about the viability of consumer-facing AI chatbots are being realized, as Inflection AI's Pi chatbot failed to gain the necessary scale and ChatGPT's web growth has stalled. Inflection AI, which raised over $1 billion last year, is now exiting its consumer chatbot effort and pivoting towards an enterprise business model. Other consumer-focused AI chatbot services are also struggling to gain the massive scale needed to challenge internet giants like Google and Meta.

OpenAI, despite having many consumer users for its ChatGPT, is leaning more into enterprise businesses, making a significant portion of its revenue from platform services such as giving outside developers paid access to its powerful AI models. OpenAI's models are also the basis for several of Microsoft's new paid enterprise AI tools. This shift indicates a growing trend towards enterprise business models in AI, as consumer-facing AI chatbots struggle to gain traction and generate significant revenue.

Key takeaways:

  • Tech investor Garry Tan's concerns about the viability of consumer-facing AI chatbots are being realized, with Inflection AI's Pi chatbot failing to gain massive scale and ChatGPT's web growth stalling.
  • There's a shift toward enterprise business models in AI, with companies like Inflection AI pivoting to create custom AI models for commercial customers.
  • Despite having many consumer users, OpenAI is leaning more into enterprise businesses, making money from platform services such as giving outside developers paid access to its powerful AI models.
  • The struggle of consumer-focused AI chatbots to gain massive scale and generate significant revenue and profit raises questions about the viability of the chatbot consumer business model.
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