ARTIFICIAL INTELLIGENCE
Public Hype vs. Internal Challenges: AI Company Struggles Behind the Scenes
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Following the craze in AI stocks? You’ve probably heard of C3.ai (NYSE:AI) — who won the stock ticker jackpot. And it only took three name changes:
2009 founding: C3 Energy (tracking emissions)
2016: C3 IoT (internet of things)
2019: Finally… C3.ai
Despite C3’s massive 153% gain this year, past employees interviewed by Bloomberg painted a troubling picture of the company:
Issues signing new customers with a micromanaging CEO Tom Siebel who impulsively fires people.
A habit of announcing unfinished products and running into delays in launching those products.
This year, Nvidia’s 160% rally is backed by strong demand for its AI chips. And Microsoft is benefiting from its investment in ChatGPT owner OpenAI.
While C3 mostly uses its tech to help other companies with analytics similar to Palantir (NYSE:PLTR), “There’s little fundamental reason to explain the recent [C3] rally,” — per Canaccord Genuity analyst Kingsley Crane.
Red flags at the company
1/ In April, Kerrisdale Capital accused C3 of inflating earnings to meet analyst estimates with a seriously overvalued stock — sending $AI down 37% in two days.
2/ Siebel used his connections to land early customers — “which drove many early wins,” but “is simply tapped out” — per Kerrisdale Capital.
3/ Baker Hughes made up 43% of C3’s sales in the recent quarter — who owned 12% of C3’s stock but has mostly sold. Baker’s CEO has also left C3’s board.
