Microsoft, Nvidia Pour Cash into Startup Inflection AI

Inflection AI isn’t really a household word. It isn’t even a stock most can invest in. At least, not yet. But Microsoft (NASDAQ:MSFT) and Nvidia (NASDAQ:NVDA), among others, are looking to make Inflection a lot more potent than it is currently. Neither stock’s investors seem especially thrilled, though, with Microsoft down fractionally in Thursday’s trading and Nvidia down a bit more than that. Both Microsoft and Nvidia have made some impressive advances in artificial intelligence over the last couple of years. Microsoft for the software side, and Nvidia more for the hardware and chips involved. However, both of them—among an array of other investors—put in a combined total of $1.3 billion into Inflection AI’s coffers for future development.

Earlier this year, Inflection AI launched a product, the first of its kind, known as Pi, a conversational AI that’s designed to work with individual users. According to Inflection AI itself, Pi is a “personal intelligence” designed to be a “…coach, confidante, creative partner, sounding board and assistant.” The cash raised so far will go into Pi’s further development, as the product is basically available to test right now. And it will indeed need some development; reports note that Inflection AI’s Inflection-1 model is roughly on par with GPT-3.5 and PaLM-540B. However, there are signs it struggled against some parts of GPT-3.5 and is completely swamped by GPT-4, according to a report from TechCrunch.

Microsoft and Nvidia branching out in this way may have brought some concerns from investors, but analysts aren’t troubled at all. Both are considered Strong Buy stocks, and both offer upside potential. However, Microsoft’s upside potential of 4.22%, thanks to its average price target of $347.94, is much lower than Nvidia’s 14.55% against its own average price target of $466.22.

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