The loss of one AI startup is an opportunity for another.
Case in point: Today, AI21 Labs, a company developing generative AI products modeled after OpenAI’s GPT-4 and ChatGPT, closed a $53 million extension to its previously Series C funding round announcement. The new tranche, which included new investors Intel Capital and Comcast Ventures, brings AI21’s total raised to $336 million.
The startup’s valuation remains unchanged at $1.4 billion.
Ori Goshen, co-founder and CEO of AI21 Labs, said the cash infusion would be spent on product development and increasing the startup’s headcount. (Maybe a few of these new hires will come from OpenAI, given the series of departures – if they don’t jump ship to Microsoft.)
“We are extremely grateful for the support of our investors who believe in our deep technology expertise,” Goshen said in a press release. “The massive deployment of AI requires a deep understanding of high-performance language models that can deliver better value and impact. Our approach is to design AI with a specific purpose, making it significantly more effective than building from scratch, and much more cost-effective.
A Tel Aviv-based startup creating a range of text generation AI tools, AI21 Labs was founded in 2017 by Mobileye co-founder Amnon Shashua, Goshen and Yoav Shoham, the company’s other co-CEO. startup. AI21’s flagship product is AI21 Studio, a paid development platform for creating custom text-based business applications based on AI21’s proprietary text generation AI models. The startup also sells access to Wordtune, a multilingual reading and writing AI assistant similar to Grammarly.
Customers can leverage AI21 Labs’ platform via APIs for specific generative AI use cases, such as summarization, paraphrasing, and grammar and spelling correction. The startup’s models support a growing number of languages, including Spanish, German, Italian and Dutch.
A21 Labs competes with OpenAI, as well as other well-funded generative AI startups including Cohere and Anthropic (and to a lesser extent marketing-focused vendors such as Jasper, Regie and Typeface). Google, AWS and Microsoft also offer tools comparable to AI21 Studio.
Shoham argues, however, that AI21 is differentiated by its “more holistic systemic approach”.
“Our AI enriches (generative AI) with knowledge and reasoning in addition to statistical inference,” he said in an emailed statement. “This allows us to define a flexible architecture with multiple generative AIs, complemented by discrete knowledge and reasoning modules.”
To what extent is it Really differentiation is subject to debate; Some providers would say they are adopting similar techniques and technologies. But one thing is certain: AI21 benefits from tangible customer dynamics. Goshen says A21 has “several” Fortune 100 companies among its client list and that Wordtune alone has more than 10 million users.
Partnerships with Dataiku and Amazon, particularly around the launch of the latter’s Bedrock generative AI development platform, may have helped.
“AI21 increasingly shares the idea that one solution does not fit all, as companies seek unique partners who understand their specific needs,” Goshen said.
Of note, A21 Labs is Intel’s second major public investment in generative AI to date, the other being Stability AI. It is surely no coincidence that Mobileye belongs to Intel and that Shashua has been an Intel employee for some time. But I also wonder if Intel is feeling pressure from competing chipmakers — notably Nvidia, which has benefited enormously from the AI boom — to step up its game in this area. That wouldn’t surprise me.