Tom Siebel, founder of the former Siebel Systems and C3.ai, issued a dire prediction Friday that as many as 80% of tech companies will likely fail as a result of the COVID-19 pandemic and the economic fallout.
High tech companies that are not able to generate cash will be “in a lot of trouble and likely out of business because there will be no sources of capital,” he said on CNBC. He added that from five to eight out of 10 software companies that have survived for the last seven years “will likely be out of business” in one to two years.
“For nine out of 10 [tech companies], it’s going to be tough…There’s going to be a lot of pain. It’s going to be really unfortunate,” he said. “This will be a very significant deleterious economic event. In fact, it’s not an economic event, it’s a biological event with enormous deleterious economic consequences.”
After 2000 and in 1989, Siebel saw downturns with high unemployment in Silicon Valley. “We’re going to see a clearing of the market again,” he said.
The U.S. unemployment rate officially hit 4.4% as officially reported on Friday, although some economists believe the rate is as high as 13 %. More than 6 million unemployment claims were made for the week ending March 28.
Unlike some tech companies, Siebel said C3.ai is in solid cash position and has been able to help with the crisis by using AI technology.
CE.ai, founded in 2009, on Wednesday announced a unified COVID-19 data lake at no cost available to researchers, beginning on April 13. The first data sets will come from 10 sources, including the World Health Organization and the European Centre for Disease Prevention and Control. On May 15, another 12 data sets will be added from South Korea, India, Indonesia and even the IEEE COVID-19 Tweets Dataset.
In less than three weeks, C3.ai was able to aggregate the epidemiological data into a federated image. “But for AI, that would be impossible,” Siebel said.
Applications for access, starting April 13, are online.
Last week, a research consortium dedicated to using AI to speed the pace of digital transformation, was launched. The group has invited developers and researchers to work to abate COVID-19. Member institutions include UC Berkeley, University of Illinois at Urbana-Champaign, MIT, Princeton, Carnegie Mellon and the University of Chicago.
Oracle purchased Siebel Systems in 2005 for nearly $6 billion. Originally, C3.ai was focused on using AI for enterprise applications in the energy segment, but its mission has grown to detect money laundering, fraud and to provide sensor health.