Are we entering the AI consolidation phase? Thoughts on where the AI market is heading with the acquisitions of well-funded AI companies like Character AI and Inflection
Very interesting analysis of the race. It seems to me that consolidation is one way to think about it. The question this account raises for me is what happens when the assumption that the current AI models are a path to something much more impactful (call it AGI if you want) turns out to be wrong. Then it seems to me there is a lot of potential for Mistral and a few other companies making small bets to win big.
AGI is just a goal. While I agree it has weight in prioritizing work internally (we still can't search our ChatGPT conversations and GPTs is an area OpenAI doesn't invest much in), the path itself is filled with breakthrough releases of powerful models that are already useful.
Reality shows that even with such a non-commercial goal, OpenAI ranks as #1 and is the default for more enterprises.
It also highlights how much companies are willing to pay for top talent. The inflection and character.ai investments were all about the people and not the tech.
Do Mistral or Cohere even even stand a chance of remaining independent? Sovereign AI has died a BigTech death already in 2024. Apple pulling funding from OpenAI is basically them realizing Anthropic is the likely winner here and maybe an acquisition target for them.
There is still a market for small specialized models. Mistral and Cohere have the know-how only a handful of companies in the world have - building foundation language models. That said, OpenAI just announced their distillation suite today, showing they are also in the game of smaller specialized models.
Great article! I read an article recently about how VC funding has changed in the generative AI era because a lot of VCs are priced out of the ridiculous costs associated with training massive models. We're seeing big tech footing the bill for a lot of AI startups or acquiring them because its necessary to secure proper funding.
Exactly, which is why most these companies' funding rounds involve one of the compute providers: Microsoft (OpenAI, Inflection, Cohere, Mistral), Amazon (Anthropic), Nvidia (Mistral, Cohere, OpenAI?).
Very interesting analysis of the race. It seems to me that consolidation is one way to think about it. The question this account raises for me is what happens when the assumption that the current AI models are a path to something much more impactful (call it AGI if you want) turns out to be wrong. Then it seems to me there is a lot of potential for Mistral and a few other companies making small bets to win big.
AGI is just a goal. While I agree it has weight in prioritizing work internally (we still can't search our ChatGPT conversations and GPTs is an area OpenAI doesn't invest much in), the path itself is filled with breakthrough releases of powerful models that are already useful.
Reality shows that even with such a non-commercial goal, OpenAI ranks as #1 and is the default for more enterprises.
It also highlights how much companies are willing to pay for top talent. The inflection and character.ai investments were all about the people and not the tech.
Agree about Inflection, although Character did show impressive user acq. and retention figures (>5m MAU).
Do Mistral or Cohere even even stand a chance of remaining independent? Sovereign AI has died a BigTech death already in 2024. Apple pulling funding from OpenAI is basically them realizing Anthropic is the likely winner here and maybe an acquisition target for them.
There is still a market for small specialized models. Mistral and Cohere have the know-how only a handful of companies in the world have - building foundation language models. That said, OpenAI just announced their distillation suite today, showing they are also in the game of smaller specialized models.
Great work!
Great article! I read an article recently about how VC funding has changed in the generative AI era because a lot of VCs are priced out of the ridiculous costs associated with training massive models. We're seeing big tech footing the bill for a lot of AI startups or acquiring them because its necessary to secure proper funding.
Exactly, which is why most these companies' funding rounds involve one of the compute providers: Microsoft (OpenAI, Inflection, Cohere, Mistral), Amazon (Anthropic), Nvidia (Mistral, Cohere, OpenAI?).