THE SCOOP Anyscale, a billion-dollar startup that builds crucial software for OpenAI and other major players in the industry, has hired a new CEO to supercharge sales, the company exclusively shared with Semafor. Keerti Melkote, founder of Aruba Networks, which he sold to Hewlett Packard Enterprise for $2.7 billion in 2015, will take the helm. Anyscale CEO and co-founder Robert Nishihara will become the company’s chief technology officer. The move is an example of the bifurcation of the current AI boom, with one group of startups spending large sums of investor money to grow user bases and advance capabilities, while other companies reap immediate rewards by building the infrastructure. No company exemplifies the “picks and shovels” value proposition better than Nvidia, which makes the most powerful hardware used to train and run AI models. But AI companies also need complex software in that effort, and that’s where Anyscale comes in. Founded in 2019, it developed an open-source project, dubbed Ray, that makes it easier for firms to quickly train AI models using vast amounts of data and on multiple GPUs at once, which can be an immense logistical challenge in itself. Training runs on the most powerful AI models are now so costly that if all of the GPUs are not synchronized in the most efficient way possible, it can amount to lighting money on fire. AnyscaleRay software is now also used by companies like Apple, Netflix, Uber and ByteDance, Nishihara told Semafor. And Anyscale has found a market for its services in small to medium-sized businesses that want to train AI models but don’t have the technical staff to handle the infrastructure. Adoption of Ray is growing six-fold year over year, he said, measured by the number of downloads of its software and the number of unique “clusters” of GPUs that utilize Ray, which has reached about 120,000 per week. But Nishihara, a 33-year-old computer scientist, says his heart wasn’t in making sales pitches. At a board meeting roughly six months ago, he suggested becoming CTO and bringing in an experienced CEO to ramp up revenue. Venture capitalist Ben Horowitz, who sits on Anyscale’s board, was a bit surprised, Nishihara said. Horowitz and his partner, Marc Andreessen, are known for their almost religious belief in founder-led startups. Nishihara said he had to reassure the board that he was still fully committed to the company. Still, Horowitz said finding the right person would be a challenge. After selling Aruba Networks to HPE, Melkote stayed on, building it into a formidable competitor to Cisco Systems. In 2021, he resigned so he could spend time with his son before he went to college. He was also thinking about starting an AI company and talking to investors. Melkote was in Japan with his son when he got a call from a16z about Anyscale, whose co-founder includes Ion Stoica, who co-founded analytics firm Databricks and is its executive chairman. Aaron Schildkrout, an early Anyscale investor who has been helping to run the company, said his biggest question when interviewing Melkote was “does this guy have the hunger?” “I came out with a strong ‘yes,’” Schildkrout said. Melkote said he realized it represented a unique opportunity to build a huge business. He also felt chemistry with the team, he said, “especially because I have walked in Robert’s shoes.” Why OpenAI gave up on building software to train AI models and outsourced it to Anyscale. → |
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