Inflection seeks up to $675mn as funding for AI groups heats up

A year-old artificial intelligence start-up set up by one of DeepMind’s co-founders is in discussions to raise up to $675mn, as the growing hype around generative AI drives a surge of investor interest.

Inflection AI, founded by Mustafa Suleyman and LinkedIn creator Reid Hoffman, is among a group of AI start-ups that are racing to build sophisticated computer programs that can write scripts and create art in seconds.

The group, which has yet to release a product, is in talks to raise two to three times the size of first funding round worth $225mn last year, according to people with knowledge of the discussions.

Suleyman, Inflection’s chief executive, said: “Ultimately, if we decide to raise, we will raise the right amount of capital to achieve our company goals.”

The proposed fundraising comes as excitement over so-called “generative AI” start-ups has soared since the launch of OpenAI’s chatbot ChatGPT late last year, creating a rare bright spot in a tech landscape dominated by tumbling valuations and job cuts.

In January, Microsoft confirmed a “multibillion-dollar investment” over several years in ChatGPT bot maker OpenAI. People familiar with the talks previously said OpenAI was seeking $10bn from Microsoft at a $29bn valuation.

California-based Anthropic recently raised $300mn from Google, while Character.ai, founded by former Google employees, is seeking to raise hundreds of millions of dollars, according to two people familiar with the discussions.

Inflection, which is building an AI personal assistant for the web, has hired AI experts from several competitors including OpenAI, DeepMind and Google who have previously helped build some of the world’s most powerful language models.

Suleyman founded Inflection following his departure from Google in early 2022. At the search giant, Suleyman led the team tasked with integrating LaMDA, one of Google’s conversational AI chatbots, into Google Search.

Before his stint at Google, Suleyman was one of three founders of DeepMind, which was set up in the UK in 2010 and was bought by Google for £400mn in 2014.

Suleyman left DeepMind in 2019 following an independent investigation into bullying and harassment accusations against him. He has publicly apologised for his behaviour, saying in a recorded interview that he “really screwed up” and was “very demanding and pretty relentless”.

Inflection previously raised money from venture capital firms including Greylock Partners, where Suleyman and Hoffman remain investors.

Suleyman said Inflection is building its own technology and plans to launch a consumer product that is currently in testing “very soon”. This is in contrast to other start-ups in the industry, including Suleyman’s former company DeepMind, which bill themselves as research organisations.

“We’re building a conversational AI, that is going to be the way that you access the world’s information,” said Suleyman. It will not answer questions on every subject, but will be specifically tailored to assist users with online tasks like making bookings and purchases.

Inflection’s goal is to build a chatbot that is factually accurate and safe. “Personal AIs . . . will feel like more than just a browser or an app. They’ll be the main way that you find stuff, do stuff, buy stuff, book stuff online,” he said.

The company has been training its generative model on Microsoft’s Azure cloud computing infrastructure, which is also used to run OpenAI’s GPT models, according to Microsoft chief executive Satya Nadella. It claims to currently have access to one of the largest clusters of GPUs, the specialised chips needed to train and run large AI models.

Additional reporting from Tabby Kinder, Richard Waters, Tim Bradshaw and George Hammond.