Artificial Intelligence firm Cohere, specialised in building foundational models, is reportedly in the final stages of negotiations to secure a substantial funding round.
Sources close to the matter suggest that the startup is on the verge of securing $500 million in investment, with an anticipated valuation reaching approximately $5 billion, Reuters reported.
Cohere has witnessed a surge in its annualised revenue run rate. Starting from $13 million in December, the figure has now soared to $22 million this month.
The growth coincides with the launch of Cohere's latest model, Command-R, a large language model that is optimised for conversational interaction and long context tasks.
Cohere, which also currently has a partnership with Oracle, intends to expand its reach by making its models accessible on various other leading cloud platforms.
Founded by former Google researchers, the Toronto-based company has strategically positioned its growth potential by specialising in enterprise-focused AI models.
Cohere garnered a valuation of $2.2 billion in June 2023 following a successful funding round that secured $270 million from investors such as Inovia Capital, Nvidia, and Oracle.
It was also eyeing a fundraising target of approximately $500 million to $1 billion around January. Existing investors are expected to participate in the upcoming funding round.
Cohere is up against big competitors like OpenAI and Anthropic, but it's concentrating on how AI can be used in businesses.
Companies developing foundation models are competing to secure funding for their costly AI model development, which demands computing power and top talent from the industry.
OpenAI, for instance, anticipates generating $1 billion in revenue by 2024 and has amassed over $10 billion in investments, including from Microsoft.
Other AI labs like Anthropic and Mistral too have garnered support from major tech firms. However, the rush to finance these AI labs, which currently operate at a loss, has prompted scepticism among some venture capitalists.
Comments