Anywhere C3.ai CEO Tom Siebel It asks the same question about the future of AI.
“Everybody asks me about it, ‘Is there a bubble here?’ There is absolutely a bubble. It’s awesome,” he says luck In an exclusive interview at C3.ai’s offices in Midtown, New York WeWork.
For the past two years, analysts have done just that he pondered AI companies, both public and private, might to live to their high ratings. At Siebel, he started his career in Silicon Valley as a sales director the oracle before leaving he ended up starting his own company returned to his former employer For $5.8 billion, he was reminded of the current state of AI the dot-com bubble. However, a great and wonderful technology—the Internet—couldn’t save a bunch of companies from going under.
“So we’re seeing this kind of thing happen with creative AI that we’ve seen with previous technologies,” Siebel said. “The market is way, way too much.”
Technical analysts that luck spoke, agreeing with Siebel’s assertion that industry-wide valuations were inflated. “For now, almost all notable AI companies have a fair level of investor enthusiasm,” said Sandeep Rao, senior research fellow at Leverage Shares, a provider of ETPs.
C3.ai specializes in AI applications that help companies with various business functions, such as supply chain optimization, predictive maintenance, and sales process tracking. It also has many lucrative contracts with the US Department of Defense and the US Air Force. Among its biggest private sector clients are the oil and gas giant the shell and energy company Baker Hughes (whose contract ready to renew soon).
Earlier this week C3.ai added another blue chip partner to its ranks announced a partnership with Microsoft. luckThe interview with Siebel took place before the partnership was publicly announced. (Former director Alan Murray Fortune Media It is in Table C3.ai).
In particular, Siebel turned to OpenAI, a startup with which it has close ties Microsoft and this is perhaps most closely associated with the AI revolution. OpenAI has a day today A valuation of $157 billion It raised $6 billion after an October funding round. Siebel was not surprised by this assessment.
“Nobody would be surprised if that company disappeared next Monday,” he said.
when luck Daring industry watchers to be shocked, Siebel responded that he “disappeared” at Thanksgiving, referring to the brief. kick out OpenAI Director Sam Altman in 2023.
“If it went away, it wouldn’t make any difference in the world,” Siebel said of OpenAI. “Nothing would change. I mean, nobody’s life would change. No company would change. Microsoft would find something else to strengthen Copilot. There are like 10 other products available that would work just as well.”
The OpenAI brand has cachet because it was first to market, but that alone can’t guarantee its market position forever, said Paul Marino, chief income officer at Themes ETF, a Greenwich, Conn.-based exchange-traded fund. Just because it’s popular doesn’t mean you can’t copy it, replicate it, and maybe surpass it,” Marino said.
According to Rao, there are differences between the major language models, but they are difficult to understand. “LLMs are very proprietary and nailing down definitive distinctions is not easy,” he said.
Their success, he adds, often owes as much to their business relationships as to the underlying technology. “The advantage of an LLM is not necessarily dictated by quality, but can be driven by low cost barriers and ease of use with existing technology,” Rao said.
In this regard, OpenAI certainly fits the bill, having established deep ties with Microsoft.
OpenAI did not respond to a request for comment on Siebel’s comments.
Siebel sees overvaluation even in early-stage AI startups.
“There’s a long list of AI startups from Illinois, Wisconsin, Stanford, that are currently being funded on Sand Hill Road, where people with little to no experience will build AI generative apps for the dentist’s office, vet, or divorce. Lawyers and these ideas are being funded at multibillion valuations,” Siebel said. “It’s just five people who don’t know anything with four pages of a business plan. This is madness.”
In recent years, there has been a proliferation of AI startups with very specific use cases, some of which have actually sold or raised money at large valuations. Their careers have been turbulent. In August 2023, Casetext, specializing in AI for legal work, was sold to Thomson Reuters. 650 million dollars. JasperAI, a startup focused on AI for marketing departments, It raised $125 million June 2023 in a Series A only at a valuation of $1.5 billion cut his internal rating three months later, he says information.
Major tech giants that develop their own suite of AI products are exempt from Siebel’s criticism. Microsoft and Amazonhe said, they are “great companies” that are not overvalued. Not even the chipmakers Nvidia and TSMC. “If TSMC went out of business it would be the end of the world,” he said.
Asked where C3.ai is, Siebel doesn’t hesitate. “C3.ai is a cheap one, ok? I mean, it’s a friend of value stocks,” he said.
