Two 22-year-old friends from Michigan turned down a multimillion-dollar offer from Elon Musk to build their own AI company. William Chen and Guan Wang, co-founders of Sapient Intelligence, met in high school and bonded over ambitious goals. Wang wanted to build an algorithm that could solve any problem. Chen aimed to optimize systems across engineering and real-world applications.
From High School Dreams to AI Breakthrough
After high school, Chen followed Wang to Tsinghua University in Beijing. The pair gained support from professors as they worked on an ambitious AI project. They decided large-language models had limitations and wanted a new architecture to overcome structural problems.
Their first success came with OpenChat, a small large-language model trained on a curated set of high-quality conversations. The model used reinforcement learning to improve itself. OpenChat quickly gained recognition in academic circles and caught the attention of Elon Musk.
Declining Musk’s Multimillion-Dollar Offer
Musk approached the students through his company xAI with a multimillion-dollar offer. Chen and Wang declined. According to NDTV, that decision led to the creation of Sapient Intelligence and their new Hierarchical Reasoning Model.
New Model Outperforms Major AI Systems
The breakthrough came in June when a prototype with only 27 million parameters outperformed systems from OpenAI, Anthropic, and DeepSeek. The model excelled on complex tasks including advanced Sudoku puzzles, maze-solving, and the ARC-AGI benchmark.
Unlike traditional transformers that predict the next word statistically, HRM employs a two-part recurrent structure. The system mimics human thought by mixing deliberate reasoning with fast reflexive responses. Chen said the model is not guessing but thinking.
Chen added that their models hallucinate far less than conventional LLMs. The technology already matches state-of-the-art performance in areas such as weather prediction, quantitative trading, and medical monitoring. Sapient Intelligence plans to open a US office soon.
Chen told Fortune that if they do not make AI smarter than humans, someone else will. He and Wang hope to be the first to make that happen.
