Inflection CEO says it’s done trying to make next generation AI models

Just a year ago, Inflection AI was one of the most exciting startups in the AI world, boasting cutting-edge models that it claimed could outpace the likes of OpenAI, Meta, and Google. Fast forward to today, and the company has taken a dramatic turn, with its new CEO revealing to TechCrunch that Inflection has completely shifted focus and is no longer vying to compete in the race to build the next-generation AI models.

What happened in the time between? A lot, actually. Inflection underwent a major shakeup when Microsoft hired then-CEO Mustafa Suleyman to lead its own AI division, paying Inflection $650 million for both its technology and most of its staff. This was a pivotal moment for Inflection, and shortly after, the company announced it would be scaling back its consumer-facing chatbot, Pi, and refocusing its efforts on enterprise clients.

Now, in a bold new direction, Inflection has pivoted to acquire three AI startups in just the past two months, signaling a shift toward building tools for global enterprises using existing AI models. Interestingly, the company isn't ruling out licensing models from its former competitors in the future. Meanwhile, the Federal Trade Commission has launched an investigation into Microsoft's partial-acqui-hire of Inflection, raising questions about whether the deal could harm competition.

According to Inflection's new CEO, Sean White, the company no longer sees itself in the business of building cutting-edge AI models. Instead, White believes the company can still compete by focusing on the enterprise sector, offering tools that meet the needs of businesses today. "I’m not going to, and don’t feel the need to, compete with a company trying to build the next 100,000-GPU system," White said, alluding to the major players like Microsoft that dominate the frontier AI model space. "I do think we’re actually still competing with them, particularly for the enterprise," he continued, emphasizing that Inflection’s strength lies in providing enterprise solutions built on today's AI capabilities.

White is skeptical about the so-called "next generation" of AI models, particularly those built to scale with increasing compute power. While some claim that the future of AI lies in massive, complex systems, White finds the emphasis on latency and computing power somewhat overblown. "There's a little piece of me that says, ‘Haha! Now we all have latency in our inference, so we’re going to call it thinking,’" White remarked. His point? Inflection isn’t interested in chasing an elusive next-gen model; it’s focused on what works today for businesses.

To that end, Inflection has been on an acquisition spree to build a suite of enterprise-focused tools. On Tuesday, the company announced it had acquired Jelled.AI, a startup that uses AI to streamline employee inbox management, and BoostKPI, which provides AI-powered data analytics tools. Just a month prior, Inflection also acquired Boundaryless, a European automation consulting firm, to expand its footprint internationally.

While Inflection still uses its own models, White hinted that the company may eventually integrate models from other AI labs as it continues to evolve. A key advantage Inflection offers is its ability to run its AI models on-premise, unlike many of the leading labs that rely on cloud infrastructure. This could be a game-changer for enterprises concerned about data security.

Despite these strides, Inflection faces stiff competition. Salesforce has gone all in on AI-powered agents, Meta is launching its own enterprise AI unit, and startups like Anthropic and Cohere are also doubling down on business-specific AI solutions. But White believes Inflection is uniquely positioned to thrive in the enterprise AI space, focusing on practical, reliable tools rather than chasing the next frontier of AI research.

In a world where the competition to build the next big AI model is fierce, Inflection’s shift to focus on enterprise solutions might just be the pragmatic approach that allows it to thrive in a crowded field.