Artificial intelligence startup Cohere is on the verge of securing $250 million in new funding from backers including Nvidia and Salesforce.
The funding round will value Cohere at around $2 billion, two people with direct knowledge of the ongoing negotiations said.
Toronto-based Cohere is seeking additional firepower to compete in an increasingly crowded AI sector with wealthy companies such as Microsoft, which invested in OpenAI’s ChatGPT.
The investment was led by Canadian venture capital fund Innovia Capital, with participation from Index Ventures, according to people familiar with the matter. Tiger Global, the technology-focused investment fund that led Cohere’s $125 million Series B round last year, is not participating in the current round.
Venture investors hope the boom in generative AI will help weather the broader technology downturn. The launch of his ChatGPT chatbot late last year kicked off a frenzy of investment in generative AI companies that can generate text, images or videos from prompts. The results are sometimes indistinguishable from human output.
“This year has flipped a switch. We are in the midst of a complete transformation in every product and company on the planet,” said Aidan Gomez, co-founder and CEO of Cohere. I’m here.
Like OpenAI, Cohere builds large-scale language models that can converse with users, but the company is focused on businesses rather than individual consumers.
Cohere allows partners to use models without access to the data. “We don’t have access, so they can put very sensitive data there,” he says Gomez.
Gomez said the company has partnered with companies including Spotify, which uses AI tools to improve podcast recommendations and search, and AI copywriting company Jasper.
But it won’t be in direct competition with OpenAI, said Gomez, a former Google researcher and co-author of a 2017 paper that paved the way for generative AI breakthroughs that have occurred in the past six months. said.
“We don’t offer consumer products. We don’t compete with ChatGPT in that sense. He said.
Cohere was looking to raise hundreds of millions of dollars at a valuation of over $6 billion, according to reports earlier this year.
But a person familiar with the talks said those talks were in the “early” stage with “a small number of investors.” Another said the $6 billion figure was “totally wrong.”
Innovia Capital did not immediately respond to a request for comment. Salesforce, Index Ventures and Nvidia declined to comment.
Additional reporting by Madhumita Murgia and Richard Waters
