Cohere, a Competitor of OpenAI, Raises $500M in Funding, Valuation Reaches $5.5B

Cohere, an emerging AI company that stands as a competitor to OpenAI, has secured an impressive $500 million in series D funding. This funding injection, aimed at expanding their team and advancing their cutting-edge AI technology, marks a significant milestone for the Canadian startup established in 2019. Cohere specializes in delivering top-tier generative AI solutions tailored explicitly for enterprise clientele.

Major industry players like Nvidia, Oracle, and Salesforce Ventures have thrown their support behind this promising startup. Notable investors in this recent funding round include Cisco, AMD Ventures, and the Canadian pension investment manager PSP Investments. Adding to this impressive lineup is Fujitsu, who not only participated in the funding but also struck up a joint development partnership with Cohere. Together, they are crafting enterprise-grade large language models specifically designed for Japanese businesses.

With this series D round, Cohere's valuation has soared to an impressive $5.5 billion, and their total capital raised now stands at $970 million. In a LinkedIn post, the startup expressed their excitement at the opportunity this funding presents. Cohere is driven to take their state-of-the-art enterprise AI technology to the next level, empowering businesses worldwide to achieve significant gains in productivity and efficiency.

Where OpenAI caters to a broad audience, from individual users to corporations, Cohere sets its sights firmly on enterprise-level clients. Their core focus lies in developing large language models tailored for intricate applications like AI chatbots. Noteworthy clients already utilizing Cohere's platform include industry giants such as Spotify, Glean, and Oracle.

Founded by former Google scientists Aidan Gomez and Nick Frosst, along with Ivan Zhang, Cohere boasts a stellar team with impressive credentials. Gomez, a co-author of a groundbreaking paper on Transformers that has reshaped large language models, is complemented by Frosst's experience at Google Brain under Geoffrey Hinton, a Turing award recipient. Cohere's dual headquarters in Toronto and San Francisco position them at the forefront of innovation in the AI landscape.

While the recent funding round positions Cohere for growth, reports indicate that the company took the tough decision to downsize by 5% shortly after the series D raise. CEO Gomez emphasized the necessity of these layoffs in a letter to employees, highlighting the pivotal need to remain competitive and industry leaders. Despite this development, Cohere remains committed to hiring new talent, particularly in key areas like customer operations, sales, marketing, and product design.