One AI startup’s undoing is another’s opportunity.
Case in point: today, AI21 Labs, a company developing generative AI products along the lines of OpenAI’s GPT-4 and ChatGPT, closed a $53 million extension of its previously announced Series C funding round . The new tranche, with participation from new investors Intel Capital and Comcast Ventures, brings AI21’s total raised to $336 million.
The startup’s valuation remained unchanged at $1.4 billion.
Ori Goshen, co-founder and CEO of AI21 Labs, said that the infusion of money will be put into product development and increasing the number of startups. (Maybe some of the new hires will be from OpenAI, given the series of departures there — if they’re not jumping for Microsoft.)
“We are very grateful for the support of our investors who believe in our deep technology expertise,” Goshen said in a press release. “The mass deployment of AI requires a deep understanding of high-performance language models that can deliver better value and impact. Our approach is about designing AI with a purpose, making it more efficient than building from scratch, and very cost-effective.”
A Tel Aviv-based startup that creates a range of text-generating AI tools, AI21 Labs was founded in 2017 by Mobileye co-founder Amnon Shashua, Goshen and Yoav Shoham, the other co-CEO of the startup. AI21’s flagship product is AI21 Studio, a pay-as-you-go developer platform for building custom text-based business apps from AI21’s proprietary text-generating AI models. The startup also sells access to Wordtune, a multilingual AI reading and writing assistant similar to Grammarly.
Customers can tap the AI21 Labs platform through APIs for specific generative AI use cases, such as summarization, paraphrasing and grammar and spelling correction. The starter models support a growing number of languages, including Spanish, German, Italian and Dutch.
A21 Labs competes with the beleaguered OpenAI as well as other well-funded startups in the generative AI space, including Cohere and Anthropic (and to a lesser extent marketing-focused vendors like Jasper, Regie and Typeface). Google, AWS and Microsoft also offer tooling comparable to AI21 Studio.
Shoham argues that AI21 is distinguished by its “more comprehensive systems approach,” however.
“Our AI enriches (generative AI) with knowledge and reasoning in addition to statistical inference,” he said in an emailed statement. “This enables us to define a flexible architecture with multiple generative AI, supported by discrete knowledge and reasoning modules.”
Its size Granted the distinction is up for debate; other vendors will argue that they adopt similar techniques and technologies. But one thing is certain: AI21 has tangible customer momentum behind it. Goshen claims that A21 counts “many” Fortune 100 companies on 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 dev platform, may have helped.
“AI21 (adds) mindshare that one size does not fit all, as businesses look for unique partners who understand their specific needs,” Goshen said.
It’s worth noting that A21 Labs is Intel’s second major public generative AI investment to date, the other being Stability AI. It’s no accident, of course, that Mobileye is owned by Intel and that Shashua has been on Intel’s payroll for a long time. But I also wonder if Intel is feeling pressure from rival chipmakers — namely Nvidia, which has benefited greatly from the AI boom — to step up its game in this area. I’m not surprised.