Nvidia-backed OpenAI rival launching new funding round

Artificial intelligence startup Cohere, backed by investors including Oracle Corp. and Nvidia Corp., is working with banks to raise a fresh round of financing, just a few months after its last one, according to people familiar with the matter.

Toronto-based Cohere is being advised by JPMorgan Chase & Co. and Goldman Sachs Group Inc. on the potential round, the people said, asking not to be identified because the matter is private.

Talks are early and details of the round, such as what amount the company is seeking, haven’t been set.

Cohere, a competitor to OpenAI, raised $270 million (R5 billion) in June from a mix of investors at a valuation of up $2.2 billion (R41 billion), Bloomberg News reported.

The company is seeking a higher valuation in the current round, one of the people said.

Representatives for Cohere, JPMorgan and Goldman Sachs declined to comment. People familiar with the Cohere’s thinking said that, even with the last round being oversubscribed, the company hopes that hiring bankers will make the fundraising process more efficient.

While many tech startups have seen their values fall and have been forced raised funds at reduced valuations, AI-focused companies are riding a wave of interest in the technology.

Tel Aviv-based AI21 Labs announced Wednesday that it has raised capital from investors, including Nvidia and Google, at a $1.4 billion (R26 billion) valuation.

Founded in 2019, Cohere builds large language models — software trained on massive swaths of the internet to analyse and generate text – and customises them for users.

Companies can use its models to do things like summarise customer emails or help write website copy.

Cohere co-founder and chief executive officer Aidan Gomez previously worked at Google, where he was a co-author of a 2017 landmark paper in AI research titled Attention is All You Need, which led to advances in the ways computers analyse and generate text.

The Information reported on 22 August that Tiger Global Management was close to selling a stake in Cohere in a deal that would have valued the company at about $3 billion (R56 billion).

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