Aidan Gomes, co-founder and CEO of Cohere Inc., attends a panel session on the first day of the World Economic Forum (WEF) in Davos, Switzerland, Tuesday, January 16, 2024.
Stefan Wermuth | Bloomberg | Getty Images
Cohere, an artificial intelligence startup founded by former Google AI researchers and backed by Nvidia, cut about 20 jobs on Tuesday, CNBC confirmed.
The company says it has about 400 employees, but the cuts come after it closed a $500 million funding round from investors including AMD, Salesforce, Oracle and Nvidia, valuing the company at $5.5 billion, more than double what it was last year.
Despite the cuts, the company is still hiring in areas including client operations, partnerships, revenue, sales, product design and modeling, according to its website.
Founded by former Google AI researchers and backed by Nvidia, Cohere’s business model focuses on generative AI for enterprises, rather than consumer chatbots, which have been a hot topic in the tech industry since OpenAI released ChatGPT in late 2022. In June 2023, Cohere raised $270 million at a valuation of $2.2 billion, with Salesforce and Oracle participating in the funding round. The company’s executives have also attended an AI forum at the White House.
“Our latest funding gives us a clear vision for Cohere’s future, which has required some internal restructuring,” a company representative told CNBC in a statement. “We are aggressively hiring to help provide businesses with the most accurate, secure and private multilingual AI solutions on the market.”
The cuts were first reported by Fortune magazine.
The generative AI field has exploded over the past year, with a record $29.1 billion invested in nearly 700 deals in 2023, up more than 260% year over year, PitchBook reports. It’s become one of the most talked-about phrases in corporate earnings calls every quarter, with the technology automating tasks in some form in nearly every industry, from financial services and biomedical research to logistics, online travel and utilities.
Some of Cohere’s competitors in the AI arms race offer both consumer and enterprise products: OpenAI, for example, released ChatGPT Enterprise in August last year, and Anthropic made its previously enterprise-only Claude chatbot available to consumers in July last year.
Cohere president and chief operating officer Martin Kong told CNBC in March that maintaining a focus on enterprise AI has allowed the company to operate efficiently and keep costs down amid chip shortages, rising costs of graphics processing units (GPUs) and ever-changing licensing fees for AI models.
According to Cohere’s website, current clients include Notion, Oracle and Bamboo HR. Conn previously told CNBC that many of its clients include companies in the banking, financial services and insurance industries. In November, Cohere told CNBC that it had seen increased customer interest after OpenAI abruptly and temporarily fired CEO Sam Altman.
In March, Cong acknowledged that changing dynamics in the hardware industry pose ongoing challenges. At the time, he said the company had a stockpile of Google chips for more than two years, which it had secured to help pre-train models in the early days of Cohere. Now, Cohere is moving toward using more of Nvidia’s H100 GPUs, which power most modern large-scale language models.
