Inflection AI leaves the race to develop next-generation AI, focusing on enterprise solutions after Microsoft spent money to buy the team and technology.
According to Techcrunch, Inflection AI, an artificial intelligence (AI) company that once made headlines for its ambition to surpass leading competitors such as OpenAI, Meta, and Google, has made a significant strategic change. The company's new CEO, Sean White, said that they will stop competing in the field of developing next-generation AI models and will focus on serving enterprise customers.
The shift comes after Microsoft acquired Inflection for $650 million last year, taking most of the startup’s staff and licensing its technology. The former CEO, Mustafa Suleyman, now leads Microsoft’s AI efforts. In recent months, Inflection has scaled back its use of its consumer AI chatbot Pi, focusing on enterprise customers.
In the past two months, Inflection AI has acquired three AI startups in its new strategy. The three acquisitions, which include Jelled.AI (employee inbox management), BoostKPI (AI data analytics), and Boundaryless (European automation consulting), are aimed at providing AI tools to businesses globally. The company also does not rule out licensing AI models from competitors in the future.
Inflection AI argues that current AI models are sufficient for most businesses. CEO Sean White is skeptical about test-time compute scaling, which is seen as a cornerstone of next-generation AI. He says AI labs describe latency as “thinking” to heighten users’ perception of the model.
“I don’t want to compete with the company that’s trying to build the next 100,000 GPU system,” White said in an interview with TechCrunch, referring to some of the well-capitalized companies that are developing advanced AI models.
He asserted that Inflection can still compete with its rivals in the enterprise space, based on the architecture and tools that suit the needs of customers. One strength of Inflection is the ability to provide AI models that can operate on-premise, as opposed to models that must run in the cloud, which is suitable for the data security needs of businesses.
However, Inflection faces fierce competition from big tech companies like Salesforce, which is focused on developing AI agents, and Meta, which just launched an enterprise AI unit. Startups like Anthropic and Cohere are also continuing to develop products specifically for enterprise customers.
Inflection believes that its strategy of focusing on the enterprise market will put it in a better position than competitors that are working hard in the field of developing advanced AI models.