AI startup seeks $5 billion valuation in latest fundraise

Cohere, an artificial intelligence startup that develops foundation models to compete with ChatGate maker OpenAI, is in advanced talks to raise $500 million at a valuation of about $5 billion, according to a person familiar with the matter.

The Toronto-based company has seen annual revenue grow to $22 million this month from $13 million in December as it launches the new model Command-R, said the source, who requested anonymity to discuss confidential matters. Was launched.

The startup founded by former Google researchers has pitched its growth potential to investors by building enterprise-focused AI models. Cohere, which currently has a partnership with Oracle, also plans to make its models available on other major cloud providers.

Last June, when Foghere raised $270 million from investors including Innovia Capital, Nvidia and Oracle, it was valued at $2.2 billion. The new appraisal he is seeking was not previously reported.

In January Reuters reported that Coheir was want to pick up About $500 million to $1 billion.

Existing investors are likely to join the latest funding round, the source said.

If successful, it could be the latest sign of investors’ appetite to fund AI startups at high valuations despite middling revenue numbers, as they bet on future adoption of AI models.

Foundation model companies are racing to raise capital to fund the expensive development of AI models, which require enormous amounts of computing power and top industry talent.

Cohere is competing with OpenAI and Anthropic, focusing on business applications of AI.

OpenAI projects $1 billion in revenue in 2024, and has raised more than $10 billion from investors including Microsoft. Other AI labs such as Anthropic and Mistral have also attracted support from big tech companies.

The race to fund loss-making AI labs has raised eyebrows among some venture capital investors, who question whether foundation models will ever earn enough revenue relative to the large amounts of capital required to develop them.

The Information first reported Cohere’s December revenue run rate on Wednesday.