An AI Startup Couldn’t Beat Microsoft. So It Joined Them

Reid Hoffman sat down with Mustafa Suleyman in the fall of 2023 to talk about the uncertain future of their startup, Inflection AI. From the moment they’d founded it 18 months earlier, there had seemed something can’t-miss about Inflection. Hoffman was perhaps the best-connected person in Silicon Valley. Suleyman, who co-founded DeepMind and sold it to Google for $650 million in 2014, was a star in his own right, as was Inflection’s other co-founder, Karén Simonyan, a top researcher in the field. Inflection’s product, a chatbot named Pi, had quickly attracted millions of monthly users by communicating a sense of emotional intelligence.

Inflection’s founders defined success as expanding that user base into hundreds of millions, and ultimately billions, of people. Their oversize ambition, and that of their investors, was a company whose value might top $1 trillion. The startup founded in a garage or a friend’s living room only to grow into tech’s next Google or Facebook had always been the essence of Silicon Valley. Yet artificial intelligence called into question whether it was even possible for a startup like Inflection to follow that path, given generative AI’s voracious demand for resources.