Posted: January 19, 2024 4:02 AM Updated: January 19, 2024 4:28 AM
Correction and fact check date: January 19, 2024, 4:02 AM
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Cohere is in talks to raise up to $1 billion in financing to develop its LLM.
Artificial intelligence (AI) startup Cohere is currently discussing raising up to $1 billion in funding. These efforts unfold in a competitive environment where investors are actively supporting language model (LLM) development, seeking capabilities comparable to those provided by Microsoft-backed OpenAI.
Cohere has not confirmed its valuation for the upcoming funding round or set a specific funding target, but the expected range is between $500 million and $1 billion. According to Crunchbase, this potential funding surpasses the cumulative amount Cohere has raised from investors in four previous funding series.
If successful, the company is expected to receive a significantly higher valuation than the $2.2 billion it achieved in June 2023, when it raised $270 million. Notable contributors to the round included Nvidia, Oracle, as well as venture firms such as Index Ventures and Inovia Capital.
Like its competitors, Cohere is actively developing an LLM designed for interactive communication with users. However, rather than pursuing consumer chatbot market dominance, the company strategically chose to target enterprise customers. This specific focus has resulted in lower development costs for Cohere compared to entities like OpenAI. OpenAI’s general-purpose tools require greater investment in deployment, training, and operating costs.
“The enterprise model is at a very different scale. There aren’t millions of people using it for free. This requires different amounts of capital,” said a fundraiser from Cohere.
Founded in Toronto in 2019 by former Google scientists Aidan Gomez, Nick Frosst, and Ivan Zhang, Cohere has emerged as one of the top three artificial intelligence startups in North America, gaining traction alongside industry leaders OpenAI and Anthropic. Aidan Gomez, CEO of Cohere, played a key role in co-authoring the seminal research paper ‘Attention Is All You Need’ during his internship at Google. This paper makes a significant contribution to the development of computer-assisted text analysis.
Cohere’s position following the surge in AI funding
AI startups require a steady stream of new capital to develop models built on significant computing power and extensive data sets. Nonetheless, more than a year after the start of the AI boom triggered by OpenAI’s introduction of ChatGPT in November 2022, investors are keenly anticipating signs that these promising startups can successfully commercialize their technology and generate a return on their investments. there is.
Cohere has strategically positioned itself as a neutral service provider serving enterprise customers. The company offers a model that is independent of any specific cloud provider, including Microsoft, which is a major backer of OpenAI and an investor in other fast-growing AI startups like Inflection. Cohere’s approach also contrasts with the significant financial commitments of Amazon and Google, which have invested billions of dollars in Anthropic.
In response to growing capital needs, AI startups have been progressively seeking partnerships with major technology companies throughout 2023.
Recently, Google-backed Anthropic announced its intention to raise $750 million in an upcoming funding round, with Menlo Ventures leading the initiative. The move comes as part of Anthropic’s ongoing efforts to secure financial support to accelerate the launch of its AI products. In 2023, Anthropic raised $4 billion in investment from Amazon and received an additional $2 billion in funding from Google.
Microsoft played a prominent role, leading the largest funding round of the year and co-leading the second-largest funding round with Nvidia. Amazon also took the lead in the third-largest funding round, according to data compiled by Metaverse post.
With this potential new round of funding, Cohere looks to transform the AI landscape and chart a unique trajectory amidst the industry’s evolving dynamics.
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About the author
Alisa is a reporter for Metaverse Post. She focuses on everything related to investing, AI, metaverse, and Web3. Alisa holds a degree in Art Business and her expertise lies in the fields of art and technology. She developed a passion for journalism through her work with VCs, notable cryptocurrency projects, and science writing. You can contact us at (email protected).
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alice davidson
Alisa is a reporter for Metaverse Post. She focuses on everything related to investing, AI, metaverse, and Web3. Alisa holds a degree in Art Business and her expertise lies in the fields of art and technology. She developed a passion for journalism through her work with VCs, notable cryptocurrency projects, and science writing. You can contact us at (email protected).
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