OpenAI Rival Cohere Secures $500M in Funding, Valuation Soars to $5.5B

Canadian AI startup secures backing from big-name tech firms as it plans to expand despite recent layoffs

Ben Wodecki, Jr. Editor

July 26, 2024

2 Min Read
GETTY IMAGES

Cohere, an AI startup and OpenAI rival, has raised $500 million in a series D funding round to expand its team and further develop its enterprise-grade AI technology. 

The Canadian startup, founded in 2019, specializes in providing generative AI services and solutions tailored for enterprise customers.

Nvidia, Oracle and Salesforce Ventures backed the startup. Cisco, AMD Ventures and Canadian pension investment manager PSP Investments were among the investors. 

Fujitsu also took part in the funding round, announcing earlier this week a "significant investment" in the startup, along with a joint development deal to create enterprise-grade large language models for Japanese businesses.

The series D round raises the startup’s valuation to $5.5 billion, bringing Cohere’s total cash raised to $970 million.

“We’re excited to announce our series D funding round that will help us expand our team and take our frontier, enterprise-grade AI technology to the next level to enable significant productivity and efficiency gains for businesses around the world,” the startup said in a post on LinkedIn.

Unlike OpenAI, which offers generative AI services for general users and businesses, Cohere focuses solely on enterprises, developing large language models for applications like AI chatbots.

Related:Fujitsu Invests in AI Startup to Develop Enterprise AI Models

Cohere lets businesses build custom enterprise applications using their data. Its platform is used by clients including Spotify, Glean and Oracle.

AI Business recognized Cohere as one of the top AI companies to watch in 2024.

It was founded by former Google scientists Aidan Gomez and Nick Frosst, along with Ivan Zhang. Gomez co-authored the seminal paper on Transformers that has revolutionized large language models, while Frosst worked at Google Brain under Turing award winner Geoffrey Hinton.

Cohere, split across Toronto and San Francisco, has been in talks with investors since the turn of the year as it sought funds to continue building business-focused AI.

Following this latest fundraising round, Cohere plans to grow its team. 

However, according to Fortune, the startup laid off 5% of its 400-person workforce just days after its series D funding round.

In a letter to staff, CEO Gomez said the layoffs were a “necessary step to ensure that we have the right people in place to remain highly competitive and at the forefront of the industry.”

The startup still plans to hire staff in strategic areas, posting jobs covering roles across customer operations, sales, marketing and product design.

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ChatGPT / Generative AI

About the Author

Ben Wodecki

Jr. Editor

Ben Wodecki is the Jr. Editor of AI Business, covering a wide range of AI content. Ben joined the team in March 2021 as assistant editor and was promoted to Jr. Editor. He has written for The New Statesman, Intellectual Property Magazine, and The Telegraph India, among others. He holds an MSc in Digital Journalism from Middlesex University.

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