Inflection AI, the startup responsible for the AI-driven chatbot Pi, has accomplished a remarkable feat by securing a substantial $1.3 billion investment. This notable achievement has significantly augmented the company’s overall value, estimated to be around $4 billion.
The recent investment of $1.3 billion in Inflection AI is just one of many successful investments in the thriving AI industry. Several tech giants including Microsoft and Nvidia, as well as high-profile individuals such as Reid Hoffman, Bill Gates, and Eric Schmidt, have supported this deal, building upon a series of lucrative investments in the industry.
In particular, Nvidia has significantly stood out as the exclusive fresh investor among the group.
After successfully launching their revolutionary chatbot Pi, Inflection AI received overwhelming interest and numerous offers, culminating in this impressive round of funding. In an interview with Forbes, Inflection AI CEO Mustafa Suleyman expressed his belief that there is immense potential for further progress once Pi validates its core thesis that conversation is the new interface. The startup recently introduced its proprietary language model, Inflection-1, which has been deemed comparable to GPT 3.5, Chinchilla, and PaLM-540B. Inflection-1 was trained using a substantial dataset and “thousands of NVIDIA H100 GPUs,” as mentioned in a research paper published by the company.
While being cautious about divulging the exact details of the funding, Suleyman made it clear that a significant portion of it was in liquid currency, albeit without providing an exact figure. Importantly, the funding round did not come with any conditions or restrictions that would compromise Inflection’s control or claim on the company. This preserves Inflection’s independence and allows them to pursue new business partnerships. Suleyman emphasized that there is no transfer of intellectual property (IP) and Inflection remains fully independent.
Inflection intends to utilize the raised funds to further improve Pi, a chatbot that facilitates interactive conversations to generate insightful questions and answers. Although specific user metrics were not disclosed by the company, Suleyman affirmed that Pi’s engagement rates are rapidly increasing as the chatbot continuously evolves and enhances its performance.
Suleyman believes that Pi is only the beginning and represents the potential for conversation-based interfaces in the future. Despite this, he foresees the need for additional funding in the upcoming period. However, he specifies that regular venture capitalists may not be suitable for this purpose, as their network and influence might not be capable of accelerating Inflection’s growth, as he stated, “Our network and reach isn’t something that regular VCs can help accelerate.”
Suleyman acknowledges that although the costs of training AI models are decreasing, Inflection’s overall expenditure is still increasing due to the requirement for larger models. Recognizing this as a significant opportunity for growth, Inflection intends to aggressively raise funds and pursue a strategy of “blitz-scaling” to support its rapid expansion.
Due to the recent funding, Inflection AI’s GPU cluster, which is already one of the largest in the world, will undergo a substantial expansion. Nvidia and service provider CoreWeave will collaborate to upgrade Inflection’s existing cluster by adding 22,000 H100s, far surpassing Meta’s 16,000 GPU cluster. Powerful equipment with significant RAM capacity is required for AI training. To compare, a widely used gaming GPU from 2019, the RTX 2060, has 6GB of vRAM, while an H100 has a staggering 80GB of vRAM. Now consider the potential of having 22,000 of those chips working in unison.
Artificial Intelligence (AI) has been a common subject of discussion among investors in 2023. Throughout the year, the stock prices of both hardware and software companies specializing in AI have been on the rise. Tech companies are working to integrate AI into their products and services aggressively, with the goal of enhancing efficiency and investor appeal. Recently, MosaicML, NoTraffic, and CalypsoAI, all AI startups, raised a total of $2 billion in recent funding rounds. The level of attention and investment in the AI startup market is unprecedented in history.
Given the current state of AI startups, it is evident that there is an undeniable and unstoppable demand for AI technology. The hunger for AI continues to grow without any indication of diminishing.
