AI21 Labs Raises $155M in Series C Funding, Reaches $1.4B Valuation

JJohn August 30, 2023 11:32 PM

AI21 Labs, a groundbreaking AI startup specializing in text-generating tools, has successfully raised $155 million in a Series C funding round, pushing the company's valuation to $1.4 billion. Despite operating in a highly competitive market, the firm has managed to make impressive strides, boasting a host of innovative products and a growing customer base.

Significant Series C funding for AI21 Labs

AI21 Labs, an AI start-up based in Tel Aviv, recently raised an impressive $155 million in a Series C funding round. The round was led by a variety of prominent investors, including Walden Catalyst, Pitango, SCB10X, and b2venture. The co-founder of AI21 Labs, Amnon Shashua, who is also the founder of the Intel-owned Mobileye, was also a part of this funding round along with tech giants Google and Nvidia. This demonstrates the firm's ability to attract significant investment from major players in the tech industry.

A powerhouse founding team

AI21 Labs has well-established roots, having been founded in 2017 by Shasuha, Shoham, and Ori Goshen, who shares the role of co-CEO with Shoham. The founders come from a rich background of tech entrepreneurship. Shoham, a Stanford professor emeritus, has previously sold two companies to Google, namely Timeful, a time management app, and Katango, a social network friends organizer. Goshen also boasts an impressive resume, having co-founded and led a number of tech companies in Israel, including telco analytics firm Crowdx. This all-star team sets AI21 Labs apart in the competitive field of AI.

Innovation through flagship products

AI21 Labs showcases a unique range of products that set it apart in the AI industry. AI21 Studio, their flagship product, operates as a pay-as-you-go developer platform that allows the creation of custom text-based business applications using AI21's proprietary text-generating AI models. A key player among these models is the top-tier Jurassic-2 model. In addition to this, the start-up also offers access to Wordtune, a multilingual reading and writing AI assistant that rivals Grammarly. These innovative products illustrate AI21 Labs' commitment to trailblazing in the AI space.

While AI21 Labs continues to make its mark in the generative AI space, it is worth noting that the company operates within a highly competitive environment. There is a growing roster of both start-ups and established companies in the field. However, it appears that AI21 Labs is currently at a funding disadvantage, particularly when compared to other AI companies like OpenAI, which has raised $11.3 billion to date. Other competitors, such as Anthropic and Cohere, have also received significant funding of $1.6 billion and $435 million respectively. Despite these challenges, AI21 Labs continues to make impressive strides in the industry.

Accelerating R&D and expanding partnerships

According to Shoham, this latest round of funding will provide significant momentum for AI21 Labs, enabling the company to expedite its research and development initiatives. The aim is to reach their goal of developing next-level AI systems, with the capability to reason across various domains. Additionally, AI21 Labs plans to pursue further partnerships across the tech ecosystem, bolstering its ties within the industry. The company also intends to expand its current team of 200 employees, with a particular focus on roles within research and business development. These plans underscore the company's ambition and commitment to growth.

Developing advanced AI models is both a complex and costly endeavor. As an example, OpenAI reportedly spent $540 million last year alone on the creation of ChatGPT. AI21 Labs' own research suggests that the costs involved in training a text-generating model, specifically one containing 1.5 billion parameters (these parameters are the variables used by the model to generate and analyze text), can reach up to $1.6 million. Jurassic-1, the predecessor to the company's Jurassic-2 model, contained a staggering 178 billion parameters, illustrating the scale and complexity of their work.

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