C3.ai CEO Tom Seibel asks the same question about the future of AI wherever he goes.
“Everybody’s asking me about it, ‘Is there a bubble here?’ There’s absolutely a bubble. It’s huge,” he explains good luck In an exclusive interview at C3.ai’s New York offices in Midtown We Work.
Over the past couple of years, analysts have pondered whether AI companies, both public and private, could possibly live up to their lofty valuations. For Seibel, who had a career in Silicon Valley as a sales executive at Oracle before leaving to start his own company, which he eventually sold to his former employer for $5.8 billion, the current state of AI Reminded him of the dot-com bubble. Even then, a great and wonderful technology—the Internet—couldn’t save many companies from ruin.
“So we have something similar going on with generative AI that we’ve seen with previous technologies,” Seibel said. “The market is way, way overvalued.”
Technical analysts said good luck Broadly agreed with Siebel’s point that prices have risen across the industry. “For now, virtually every notable AI company has a fair amount of investor hype,” said Sandeep Rao, senior researcher at Leverage Shares, an ETPs provider.
C3.ai specializes in enterprise AI applications that help companies with various business tasks such as optimizing their supply chain, predictive maintenance, and tracking their sales processes. It also has a string of lucrative government contracts with the likes of the US Department of Defense and the US Air Force. Its biggest private sector customers include oil and gas giant Shell and energy giant Baker Hughes (whose contract is due to be renewed soon).
Earlier this week C3.ai added another blue-chip partner to its ranks when it announced a partnership with Microsoft. good luckThe interview with Seibel was conducted before the partnership was made public. (Former Fortune Media CEO Alan Murray joins C3.ai’s board).
In particular, Siebel targeted OpenAI, a startup with close ties to Microsoft and perhaps most closely associated with the AI revolution. OpenAI currently has a $157 billion valuation after an October funding round in which it raised $6 billion. Sable was not impressed by the value.
“No one would be surprised if that company disappeared next Monday,” he said.
when good luck Thinking that industry observers would be surprised, Seibel replied that it had “disappeared” on Thanksgiving, a reference to the brief ouster of OpenAI CEO Sam Altman in 2023.
“If it disappeared, it wouldn’t make a difference in the world,” Seibel said of OpenAI. “Nothing will change. I mean, no one’s life will change. No company will change. Microsoft will find something else to power Copilot. There are 10 other products available that will do it just as well.
Paul Marino, chief revenue officer of Greenwich, Conn.-based exchange-traded fund Themes ETF, said the OpenAI brand name is cachet because it was first on the market, but that alone guarantees its market position forever. Can’t give Just because you’re so famous doesn’t mean you can’t be copied, imitated, and maybe even surpassed,” Marino said.
According to Rao, there are differences between the major language models, but they are difficult to understand. “LLMs are highly proprietary and it’s not easy to eliminate absolute distinctions,” he said.
He adds that their success is often due to their business relationships as much as their underlying technology. “The LLM advantage is not necessarily qualitative but can be determined by lower cost constraints and ease of use with existing tech instead,” Rao said.
In this regard, OpenAI certainly fits the bill by establishing a close relationship with Microsoft.
OpenAI did not respond to a request for comment about Siebel’s comments.
Siebel also sees tremendous value in early-stage AI startups.
“There’s a long list of AI startups out of Illinois, Wisconsin, Stanford, that are being funded today on Sand Hill Road, where little ideas come from very inexperienced people, dentist offices, veterinarians. So generative AI applications are going to be developed, or divorce lawyers and those ideas are being funded at multi-billion dollar prices. They’re just five people who don’t know anything [with] Four pages of business plan. It’s crazy.”
Over the past few years, there has been a flurry of AI startups with very specific use cases, some of which have gone on to sell or raise money at really big prices. Their track record is mixed. In August 2023, CaseText, which specializes in AI for legal work, was sold to Thomson Reuters for $650 million. JasperAI, a startup focused on AI for marketing departments, raised $125 million in Series A in June 2023 at a $1.5 billion valuation, only to cut its intrinsic value three months later, according to . Information.
Exceptions to Siebel’s criticism are the big tech giants that are developing their own suites of AI products. Microsoft and Amazon are “great companies” that are undervalued, he said. Neither are chipmakers Nvidia and TSMC. “It would be the end of the world if TSMC went out of business,” he said.
When asked where C3.ai comes from, Seibel naturally has no doubts. “C3.ai is a bargain, right? I mean, it’s a value stock dude,” he said.
