The AI hype bubble is deflating. Now comes the hard part. [Video]

SAN FRANCISCO – Last June, Inflection AI was riding high. The artificial intelligence startup founded by veterans of Google’s famous DeepMind AI lab had just raised $1.3 billion from Microsoft and tech billionaires Bill Gates, Reid Hoffman and Eric Schmidt to build out its chatbot business.

But less than a year later, the tide has turned. Co-founders Mustafa Suleyman and Karén Simonyan have left Inflection AI for jobs at Microsoft, which also now has the rights to use its technology. Inflection AI is now focused on helping other companies improve their own AI tools.

It’s not the only case of AI hype coming back down to Earth. After 11 months of public testing, Google’s AI search tool still constantly makes mistakes and hasn’t been released to most people. New scientific papers are undermining some of the flashier claims about the tech’s capabilities. The AI industry is also facing a growing …