Just a few weeks ago, Californian AI startup Inflection AI released its chatbot Pi, which it sees as “personal AI” designed to help people with everyday tasks. The company, which is only a little over a year old, has now been able to raise fresh capital for further growth in a round of financing from well-known investors.
• Inflection AI raises $1.3 billion in funding round
• One-year-old AI startup now valued at $4 billion
• Capital is to be used to build a system that would rank second among supercomputers
As reported by Inflection AI on its website, the startup from Palo Alto, California raised 1.3 billion US dollars in fresh capital at the end of June. It was the second round of funding after the AI company raised $225 million from investors in early 2022. With Microsoft, the former Google CEO Eric Schmidtmulti-billionaire Bill Gates and LinkedIn and Inflection co-founder Reid Hoffman, some of the original investors have now re-entered the funding round. The graphics chip manufacturer NVIDIA also came on board as a new investor. According to “Reuters”, Inflection AI was valued at around four billion US dollars as part of the financing round.
According to media reports, the capital collected consists of a mixture of cash and cash equivalents such as cloud credit. However, according to Forbes, Inflection AI declined to provide a precise breakdown of the funds. However, as Inflection CEO Mustafa Suleyman told the magazine, a very large chunk is made up of US dollars and the startup now has “all the funds we need to operate and work.” It is also not known how many shares Microsoft, NVIDIA and the other financiers each hold in the AI startup in return for their investment. However, according to Suleyman, neither Microsoft nor NVIDIA have preferential rights or ownership-like controls. “We’re still completely independent and have the freedom to do what we want and work with who we want on a commercial level, so there aren’t really any limitations,” the CEO said, according to Forbes.
Inflection AI specialized in “personal AI”
According to the company, Inflection AI was founded in early 2022 by LinkedIn co-founder Reid Hoffman, DeepMind co-founder Mustafa Suleyman and Karén Simonyan. Simonyan also used to work for the AI company DeepMind, which was bought by Google in 2014. According to “Reuters”, the startup now has around 35 employees and is considered one of the top rivals of the ChatGPT developer OpenAI, which is also supported by Microsoft.
According to “Reuters”, Inflection AI uses a similar technology to ChatGPT for its chatbot Pi – short for “personal intelligence” – which was presented at the beginning of May. However, according to the startup, Pi is designed to be “a digital companion” who is “always at hand is when you want to learn something new, when you need a sounding board to talk about a difficult moment in your day, or when you just want to spend time with a curious and friendly counterpart”. Pi has a high emotional intelligence and is suitable for everyday tasks – but not for generating code or writing essays.
Inflection wants to be a world leader in AI
As Inflection co-founder and CEO Suleyman told Forbes, the startup was “overwhelmed with offers” after the launch of Pi, which is why the mostly insider group of investors proposed the new round of funding. The money raised will now be used to further develop Pi and build computing power to develop a new generation of large-scale and more powerful AI models. “We will build a cluster of around 22,000 H100 [gemeint sind NVIDIA H100 Tensor-Core-Grafikprozessoren; Anm. d. Red]. That’s about three times more computing power than was used for the entire training of GPT4,” Suleyman said, according to “Reuters”. According to Inflection AI, if this system were already running today, it would be number two on the TOP500 list of supercomputers.
Inflection currently operates a cluster with 3,500 H100 accelerators – and according to the company has already achieved record results in the MLPerf benchmark, which is the industry standard for training and inference in the AI sector. The Inflection AI cluster is currently the fastest in this benchmark when training large language models. “Through our collaboration with NVIDIA, we were able to optimize our cluster to make it the absolute best in the world. We can now objectively say that we have the best hardware in the world,” Inflection co-founder Suleyman told Forbes.
Microsoft not only in Inflection AI as an anchor investor
“It’s an exciting time, and ambitious AI companies like Inflection AI are pioneering the industry with transformative products that are accessible and easy-to-use, demonstrating the many possibilities of AI,” said Microsoft CTO Kevin Scott in the press release Inflection AI quoted on the funding round. In return, the Inflection CEO also found words of praise for the tech giant, which also supports its competitor OpenAI with billions. “Microsoft is great, they drive us forward, they are our anchor,” Suleyman said, according to Forbes.
So while Microsoft is taking a multi-pronged approach to investing in promising AI developments, Inflection co-founder Reid Hoffman is now apparently focusing more on his startup: According to “Reuters”, Hoffman resigned from the OpenAI board in March and referred to possible conflicts due to his work with AI startups. However, he remains a board member at Microsoft and a partner at venture capitalist Greylock, which invested in Inflection AI in its first round of funding in 2022.
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