C3.ai CEO Tom Siebel asks the same questions about the future of AI wherever he goes.
“Everyone asks me about it, ‘Is there a bubble here?’ Absolutely there is a bubble. It’s huge,” he says. luck Speaking in an exclusive interview at C3.ai’s New York office at WeWork in Midtown.
Over the past two years, analysts have pondered Whether public and private AI companies can live up to their lofty reputations. Mr. Siebel started his career as a sales executive for Oracle in Silicon Valley before leaving to start his own company. sold back to former employer At $5.8 billion, the current state of AI reminded him: dot com bubble. Yet, the Internet, a great and amazing technology, has not been able to save many companies from bankruptcy.
“So the same things we’ve seen with previous technologies are happening with generative AI,” Siebel said. “The market is significantly overvalued.”
The technology analyst luck Those interviewed generally agreed with Siebel’s point that valuations across the industry have been inflated. “Right now, almost all the big-name AI companies are enjoying a fair amount of hype from investors,” said Sandeep Rao, a senior researcher at Leverage Shares, which offers ETPs.
C3.ai specializes in enterprise AI applications that help companies with a variety of business functions, including supply chain optimization, predictive maintenance, and sales process tracking. It also has numerous lucrative government contracts with the U.S. Department of Defense and the U.S. Air Force. Some of the private sector’s biggest customers include oil and gas giant Shell and energy company Baker Hughes, which has contracts with Scheduled update soon).
Earlier this week, C3.ai added a new blue-chip partner to its ranks. announced partnership with Microsoft. luckThe interview with Siebel took place before the partnership became public. (Former CEO of Fortune Media, Alan Murray, is a member of C3.ai’s board of directors).
In particular, Siebel took aim at OpenAI, a startup with close ties to Microsoft and perhaps most closely associated with the AI revolution. OpenAI raised $6 billion in a funding round in October and is currently valued at $157 billion. Siebel was not impressed with that assessment.
“No one would be surprised if that company disappears next Monday,” he said.
when luck Siebel dared to say that industry insiders would be surprised, but Siebel responded that it “disappeared” during Thanksgiving. expel In 2023, OpenAI CEO Sam Altman says:
“If it disappeared, it wouldn’t make any difference in the world,” Siebel said of OpenAI. “Nothing will change. I mean, no one’s life will change. No company will change. Microsoft will find other ways to enhance Copilot. There are other products that are just as effective. There are about 10 types.
OpenAI’s brand name has gained prestige because it was first to market, but that alone doesn’t guarantee its market position in perpetuity, says Greenwich, Conn.-based exchange-traded fund Themes ETF. said Paul Marino, Chief Revenue Officer. “Just because something is very well known doesn’t mean it can’t be imitated, imitated or surpassed,” Marino said.
In Rao’s view, there are differences between large-scale language models, but they are difficult to understand. “The LLM is very proprietary and it’s not easy to make a clear distinction,” he said.
Their success, he added, is often due to business relationships as well as the underlying technology. “The benefits of LLM are not necessarily determined by quality, but may instead be determined by the low cost barrier and ease of use of existing technology,” Rao says.
In this regard, OpenAI, which has a deep relationship with Microsoft, certainly fits the bill.
OpenAI did not respond to a request for comment on Siebel’s comments.
Siebel also sees overvaluation across early-stage AI startups.
“There is a long list of AI startups from Illinois, Wisconsin, and Stanford raising money today on Sand Hill Road that are looking to build generative AI applications for dental clinics and veterinarians, and are very experienced. “There are very few ideas by shallow people, or divorce lawyers, and these ideas are funded at multi-billion dollar valuations,” Siebel said. They are “just five people who don’t know anything” [with] 4 pages of business plan. This is crazy. ”
Over the past few years, we’ve seen a rash of AI startups emerge with very specific use cases, some of which are actually selling or raising capital at high valuations. Their track record is mixed. In August 2023, Casetext, which specializes in AI for legal services, was sold to Thomson Reuters. $650 million. JasperAI is a startup focused on AI for the marketing sector. Raised $125 million Series A in June 2023 at a valuation of $1.5 billion, lower internal evaluation According to 3 months later, information.
Big tech companies that develop their own suites of AI products are exempt from Siebel’s criticism. He said Microsoft and Amazon are “great companies” that are not overvalued. The same goes for chip makers Nvidia and TSMC. “If TSMC goes out of business, it will be the end of the world,” he said.
When asked where C3.ai belongs, Siebel understandably had no doubts. “C3.ai is a bargain, right?” So it’s in the value class,” he said.
