The Rise and Fall of Inflection's Emotionally Intelligent Chatbot
In the past few years, AI has set Silicon Valley on fire. The new book AI Valley: Microsoft, Google, and the Trillion-Dollar Race to Cash in on Artificial Intelligence chronicles those blazing high times, telling the stories of the startups, venture capital firms, and legacy tech companies that are burning bright-and those that have already flamed out.
In the excerpt below, author Gary Rivlin tells the inside story of the startup Inflection, which was established in 2022 by LinkedIn founder Reid Hoffman and DeepMind founder Mustafa Suleyman. Inflection hoped to differentiate itself by building a chatbot with a high emotional intelligence, and the company was at one point valued at US $4 billion. But its chatbot, Pi, failed to gain market share and in March 2024 Microsoft acquired most of the company's workforce, leaving what was left of Pi to be licensed for use as a foundation for customer service bots.
Pi was not human and therefore could never have a personality. Yet it would fall on Inflection's personality team" to imbue Pi with a set of characteristics and traits that might make it seem like it did. The team's ranks included several engineers, two linguists, and also Rachel Taylor, who had been the creative director of a London-based ad agency prior to going to work for Inflection.
Mustafa gave me a little bit of an overview of what they were working on, and I couldn't stop thinking about it," Taylor said. I thought maybe it would be the most impactful thing I ever worked on."
Humans develop a personality through a complex interplay of genetics and environmental influences, including upbringing, culture, and life experiences. Pi's personality began with the team listing traits. Some were positives. Be kind, be supportive. Others were negative traits to avoid, like irritability, arrogance, and combativeness.
You're showing the model lots of comparisons that show it the difference between good and bad instances of that behavior," Mustafa Suleyman said-reinforcement learning with human feedback," in industry parlance, or RLHF. Sometimes teams working on RLHF just label behavior they want a model to avoid (sexual, violent, homophobic). But Inflection had people assigning a numerical score to a machine's responses. That way the model basically learns, Oh, this was a really good answer, I'm going to do more of that,' or That was terrible, I'm going to do less of that,'" said Anusha Balakrishnan, an Inflection engineer focused on fine-tuning. The scores were fed into an algorithm that adjusted the weighting of the model accordingly, and the process was repeated.
Developing Pi's Personality TraitsUnlike many other AI companies, which outsourced reinforcement learning to third parties, Inflection hired and trained its own people. Applicants were put through a battery of tests, starting with a reading comprehension exercise that Suleyman described as very nuanced and quite difficult." Then came another set of exams and several rounds of training before they were put to work. The average teacher" earned between $16 and $25 an hour, Suleyman said, but as much as $50 if someone was an expert in the right domain. We try to make sure they come from a wide range of backgrounds and represent a wide range of ages," Suleyman said.
Inflection had many hundreds of teachers training Pi in the spring of 2023. In some cases, we paid several hundred dollars an hour for very, very specialist people like behavioral therapists, psychologists, playwrights, and novelists," Suleyman said. They even hired several comedians at one point, to help give Pi a sense of humor. Our aim is a much more informal, relaxed, conversational experience," Suleyman said.
The company met a self-imposed deadline of March 12, 2023 for a beta version of Pi that they shared with thousands of testers. With its beta release, the company emerged from stealth mode. A press announcement described Pi as a supportive and compassionate AI that is eager to talk about anything at any time." The company described Pi a new kind of AI" different than other chatbots on the market, By May, the app was free and available to anyone willing to register and sign in to use the service.
The New York Times rarely runs even a short item about the release of a new product, especially one from a small, unknown startup. Yet few companies could boast of founders with the connections and star power of Inflection: Reid Hoffman, the co-founder of LinkedIn, and Suleyman, who was AI royalty as a cofounder of DeepMind. This clout translated into prime real estate on the front page of the Times Business section, including a large, eye-catching illustration and a headline that stretched across multiple columns: My New BFF: Pi, an Emotional Support Chatbot." Reporter Erin Griffith was skeptical of the breathing exercises that Pi suggested to help her relieve the stresses in her life. But the bot did help her develop a plan for managing a particularly hectic day, and it certainly left her feeling seen. Pi reassured Griffith that her feelings were understandable," reasonable," and totally normal."
Suleyman posted a manifesto on the Inflection website on the day Pi was released. Social media basically had poisoned the world, he began. Outrage and anger drove engagement, and the lure of profits proved too strong. Imagine an AI that helps you empathize with or even forgive the other side,' rather than be outraged by and fearful of them," Suleyman wrote. Imagine an AI that optimizes for your long-term goals and doesn't take advantage of your need for distraction when you're tired at the end of a long day." He described the AI they were building as a personal AI companion with the single mission of making you happier, healthier, and more productive."
In June 2023, Inflection announced its series A funding round. Suleyman and Hoffman had gone out thinking they would raise between $600 million and $675 million, but after the launch of Pi, Inflection was pegged as one of the hot new startups. A long list of investors wanted a piece. We were overwhelmed with offers," Suleyman said. In the end, they raised $1.3 billion on a venture round that valued Inflection at $4 billion.
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Pi's willingness to tackle virtually any subject was a point of pride inside Inflection. Where other bots shut down users if they stepped anywhere near a sensitive topic, Pi invited a conversation. It will try to acknowledge that a topic is sensitive or contentious and then be cautious about giving strong judgments and be led by the user," Suleyman said. Pi corrected statements of fact that were wrong so as not to perpetuate misinformation but rather than outright reject a view, it offered counterevidence.
Suleyman was particularly proud of Pi in the weeks after Hamas's attack on Israel and the subsequent bombing campaign Israel waged in Gaza. It was good in real time while things were unfolding, it's good now," he said two months into the hostilities. It's very balanced and evenhanded, very respectful." If it had one bias, it was a deliberate one in favor of peace and respect for human life," Suleyman said. A bot that believed at its core in the sanctity of human life did not seem a bad thing.
Taylor deemed the first version of Pi acceptable." It was very, very polite and very formal," she said. But there wasn't the conversationality we wanted." Pleasant. Positive. Respectful. Those were all admirable traits but didn't exactly add up to the fun" experience they were selling. Yet finding that right balance proved difficult. The personality team would turn the dial up on one trait or another but it was as if they were playing Whac-A-Mole. They would fiddle with the weights and coax the model to use more slang and colloquialisms, but then Pi was a little bit too friendly and informal in a way people might find rude," Taylor said.
The wide range of preferences among users was a consistent topic of conversation inside the company. Pi's default mode was friendly" but a short list of alternatives was added for people to choose from: casual, witty, compassionate, devoted. Pi would shift modes if a user told it they were looking for a sympathetic ear and not the friend who tries to fix a problem. But the future Pi, as imagined by Suleyman, was a model that read a person's emotional tone and quickly adjusted on its own, much as someone might do if greeting a friend with a hearty hello but then switching immediately when learning they're calling with bad news. But bots were not at the point where they could read a person's preferences without clear instructions. It took at least ten turns of the conversation, Suleyman said, and as many as thirty to discern a user's mood.
In the future, an AI is going to be many, many things all at once," Suleyman said. People ask me, Is it a therapist?' Well, it has flavors of therapist. It has flavors of a friend. It has flavors of supernerdy expert. It has flavors of coach and confidant." Among their lofty goals was a Pi that had multiple personalities, like a cyborg Sybil with a dissociative identity disorder. As they saw it, Pi eventually would be able to assume a near-limitless number of modes able to match the moment.
By December 2023, Pi was available for Android and its roughly 3 billion worldwide users. But Suleyman and others at Inflection were vague about user numbers-deliberately so. They were a disappointment. That fall, pollsters asked people who used chatbots which one they turned to most often. Fifty-two percent said ChatGPT and another 20 percent named Claude. Perplexity was third with a 10 percent share, followed by Google's Bard (9 percent) and Bing (7 percent). Pi was lumped in with the 2 percent of users who selected other."
The company had its usual long to-do list. Yet their main challenge was teaching Pi to get better at a wider range of tasks. People thought of Pi as a conversationalist, which was a good thing, but a helper that is good only at talking is limited. Pi can't code," Balakrishnan said that winter. It needs to get better at reasoning. It can't take actions. It's only really useful if you want to talk about your feelings."
From the book: AI Valley: Microsoft, Google, and the Trillion-Dollar Race to Cash In on Artificial Intelligence by Gary Rivlin. Copyright (C) 2025 by Gary Rivlin. Reprinted courtesy of Harper Business, an imprint of HarperCollins Publishers.