Generative AI startup AI21 Labs lands $155M at a $1.4B valuation

AI21 Labs, a Tel Aviv-based startup creating a spread of text-generating AI instruments, has raised $155 million in a Collection C funding spherical led by Walden Catalyst, Pitango, SCB10X, b2venture, Samsung Subsequent and Amnon Shashua, the founding father of Intel-owned Mobileye and an AI21 Labs co-founder. Google and Nvidia additionally participated.

The tranche, which brings AI21 Labs’ complete raised to $283 million, values the corporate at $1.4 billion — a bit larger than the determine ($1.2 billion) The Info reported earlier right this moment.

“AI21 Labs got here out of stealth in October 2020 with our first launch of Wordtune,” Yoav Shoham, one among AI21 Labs’ co-CEOs, informed TechCrunch in an e-mail interview. “Since then, we’ve solely managed to develop, greater than doubling our workforce with plans so as to add much more staff .. We’ve centered on rising responsibly, permitting us to proceed to develop and broaden, bringing our prospects probably the most up-to-date, reliable AI potential.”

AI21 Labs was based in 2017 by Shasuha, Shoham and Ori Goshen, the startup’s different co-CEO. Shoham, a professor emeritus at Stanford, beforehand bought two corporations to Google, the time administration app Timeful and social community associates organizer Katango. Goshen was additionally a serial entrepreneur, having co-founded and led a number of Israel-based tech corporations together with the telco analytics agency Crowdx.

AI21 Labs’ flagship product is AI21 Studio, a developer platform for constructing customized text-based enterprise apps off of AI21’s proprietary text-generating AI fashions. The startup additionally sells entry to Wordtune, its multilingual studying and writing AI assistant.

Clients can faucet AI21 Labs’ platform for particular generative AI use instances by way of APIs, like summarization, paraphrasing and grammar and spelling correction. The startup’s fashions help a rising variety of languages, together with Spanish, German, Italian and Dutch.

AI21 Labs competes with a rising roster of startups and incumbents within the red-hot generative AI house.

Google, AWS and Microsoft supply tooling corresponding to AI21 Studio, as do startups like Cohere, OpenAI and Anthropic (and, to a much less extent, marketing-focused distributors corresponding to Jasper, Regie and Typeface). And it’s at a funding drawback; OpenAI has raised $11.3 billion so far, whereas Anthropic and Cohere have raked in $1.6 billion and $435 million, respectively.

However Shoham is adamant that AI21 Labs’ options are superior in a number of elements.

For one, he says, they’re developed on “among the world’s largest and most refined giant language fashions” and supply “extra refined management” than many generative AI apps available on the market. Furthermore, Shoham claims, they’re educated on up-to-date information, not like text-generating fashions educated on older information, which may’t precisely reply questions on present occasions.

“The AI21’s AI programs are straightforward to combine and generate dependable, reliable and correct outcomes,” Shoham mentioned. “The standard and amount of coaching information is a large problem within the trade. We’ve labored onerous to make sure that we’re utilizing up-to-date information, continuously coaching our fashions on further information and dealing to make sure that the info used is dependable and reliable.”

Having not examined AI21 Labs’ merchandise not too long ago, I can’t communicate to the veracity of these claims. However exaggerated or no, AI21 Labs seems to be gaining some traction.

Shoham — who wouldn’t reveal the scale of AI21 Labs’ buyer base, save that it contains “a number of” Fortune 100 corporations — says that Wordtune alone has over 10 million customers. And AI21 Labs was a launch companion for Amazon’s Bedrock generative AI app growth platform.

Shoham says that the newest funding tranche will enable AI21 Labs to speed up its R&D efforts and “attain its objective of creating the subsequent degree of AI,” with “the capabilities of reasoning throughout many domains.” AI21 Labs additionally plans to pursue extra partnerships with corporations “throughout your complete tech ecosystem” and enhance its 200-person headcount, with a main give attention to roles in analysis and enterprise growth.

It’ll actually want the cash, given the capital-intensive nature of creating giant language fashions.

In keeping with The Info, OpenAI spent $540 million final 12 months creating ChatGPT. And AI21 Labs’ personal analysis pegs the bills for creating a text-generating mannequin with 1.5 billion parameters (i.e., variables that the mannequin makes use of to generate and analyze textual content) at as a lot as $1.6 million. For reference, the predecessor to Jurassic-2, Jurassic-1, contained 178 billion parameters.

That’s not accounting for internet hosting prices to serve the fashions.

OpenAI was at one level reportedly paying as much as $700,000 a day to maintain the infrastructure internet hosting ChatGPT up and operating. Again-of-the-napkin math pegs the price of operating a mannequin the scale of GPT-3, and older OpenAI-developed mannequin, at $87,000 per 12 months on a service like AWS.

AWS counts AI21 Labs as a companion, so it’s not clear if there’s some type of quantity discounting in play. However I’d wager to guess that it’s not an insignificant overhead.