Appen, an AI business that formerly trained models for Microsoft, Nvidia, and Google, has lost top revenue and marketing leaders.
Andrew Ettinger, the Australian company’s chief revenue officer, and Alicia Hale, the marketing chief, resigned last week, according to an internal memo seen by CNBC. Both executives joined the organization last year.
“Strengthening our sales and marketing function remains a top priority for the business,” CEO Ryan Kolln stated in a memo shared with CNBC. “There is no change to our strategy to grow revenue from existing and new customers.”
Alphabet announced in January that it was terminating its relationship with Appen, which had previously trained Google’s chatbot and other AI products. Two weeks following that decision, Appen CEO Armughan Ahmad resigned after only 12 months on the job.
Although generative AI is booming, Appen, a former industry favorite, has been losing business as tech companies spend billions of dollars training their own large language models (LLMs) or building on the leading AI platforms. They are all seeking a market that is expected to generate $1 trillion in sales within a decade.
Despite Appen’s once-enviable client list and nearly 30-year history, revenue fell 30% in 2023, following a 13% dip the year before. The company ascribed the decline to “challenging external operating and macroeconomic conditions.”
Former employees told CNBC last year that the company’s failure to transition to generative AI was due to years of lax quality standards and a fractured organizational structure.
According to the recent message, the company’s vice president of sales and vice president of global solutions will now report directly to Kolln, who stated that the company is “targeting customers who are currently spending on data services.”
Previously, five customers—Microsoft, Apple, Meta, Google, and Amazon—accounted for 80% of Appen’s income, and the business used its platform of about 1 million freelancing workers in more than 170 countries to train some of the world’s premier AI systems.
According to Appen’s filing, Alphabet informed Appen of the termination in January following a “strategic review process,” which took effect on March 19. The company stated at the time that they had “no prior knowledge of Google’s decision to terminate the contract.” According to a January filing, Appen’s revenue from work with Alphabet accounted for $82.8 million of its $273 million in revenues in 2023.
Appen’s shares peaked on the Australian Securities Exchange in August 2020 at AU$42.44 ($27.08), bringing the company’s market capitalization to $4.3 billion. The corporation has since lost 99% of its worth.
According to public information and interviews with CNBC, Appen has previously worked for tech companies on projects such as evaluating the relevance of search results, assisting AI assistants in understanding requests in different accents, categorizing e-commerce images using AI, and mapping out the locations of electric vehicle charging stations.
Today’s LLMs, which power OpenAI’s ChatGPT and Google’s Gemini, explore the digital realm for sophisticated responses and advanced pictures in response to simple text questions. Companies are spending significantly more on Nvidia chips than on external AI training from companies such as Appen.
“I’m highly focused on supporting our sales team so that they can be as effective as possible,” Kolln stated in the memo. “To achieve this, we need to equip them with the content and messaging that differentiate Appen vs our competitors.”
Appen did not immediately respond to a request for comment.
