Cohere co-founder sees big AI opportunity in enterprise, happy to stay out of ChatGPT’s way
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Cohere co-founder Nick Frosst is surrounded by chatter of artificial general intelligence, or AGI. He’s perfectly happy to stay out of the conversation.
Founded in 2019, by ex-Google AI researchers, Cohere is valued in the billions of dollars and is one of the more high-profile names in the world of generative AI, which has exploded since OpenAI debuted ChatGPT in late 2022.
But it’s not a company that’s well known among consumers, who have swarmed to chatbots and other tools from OpenAI, Google and Perplexity. Rather, Cohere is all about business.
“I’m in meetings with companies in health care, banking and IT all the time,” Frosst told CNBC in an interview this week. “The questions I get are about securely automating tasks like HR, payrolls, research and fraud detection to drive productivity. No one has ever asked me about achieving AGI, let alone ASI.”
The latter is short for artificial superintelligence, or AI that significantly surpasses human intelligence. OpenAI and Anthropic have both made it their goal to achieve it.
In its latest funding round in July, Cohere raised $500 million at a $5.5 billion valuation, more than doubling its valuation from the prior year. Investors in the company include Nvidia, AMD, Salesforce and Oracle.
While that would historically be a huge price tag for a company that’s not even five years old, it’s a fraction of what investors are paying for OpenAI, valued at $157 billion in a round announced in October, and Anthropic, which CNBC confirmed this week is in talks to raise funding at a $60 billion valuation.
Some of Cohere’s chief competitors in the AI arms race offer products for both consumers and businesses. OpenAI, for instance, launched ChatGPT Enterprise in 2023, and Anthropic rolled out Claude Enterprise in September.
Frosst said Cohere’s preference for the enterprise is centered around the idea that large language models are best at automating tedious tasks and “being a co-worker.”
“Really, it’s an automation tool,” Frosst said. “When I think about my personal life, there’s actually not a ton that I want to automate. I don’t want to write text messages to my friends faster. I don’t want to respond to emails more efficiently in my own life. But in my work life, I really, really do want to do that.”
Frosst said, “I want to be free to think creatively and not be bogged down.”
Shortly after closing its funding round in July, Cohere cut about 20 jobs. A company representative said at the time it was an “internal realignment” and that Cohere had a “clear vision for the future.”
That vision includes going all-in on AI agents.
While the term AI agents isn’t neatly defined, it’s generally meant to describe AI services that go a step beyond chatbots. Agents are typically designed for specific business functions, rather than general purpose, and can be customized on the big AI models.
They can perform multistep, complex tasks on a user’s behalf and generate their own to-do lists, so that users don’t have to walk them through the process step-by-step.
Staying capital efficient
On Thursday, Cohere debuted its early access program for its AI agent platform called North, which is focused on allowing users with any level of technical background to “instantly customize and deploy AI agents” and do so “with just a few clicks,” the company said in a press release. Users can search for information across their organizations in multiple languages and in divisions with programs that weren’t previously connected.
That includes summarizing questions and answers in HR, speeding up the amount of time spent on finance reports and automating some core business functions in customer support and IT.
Frosst said that the platform can be used in any industry, but the company plans to target finance and health care, where data privacy and regulation are paramount.
Martin Kon, Cohere’s operating chief, told CNBC in March that by staying focused on enterprise AI, the company is able to run efficiently and keep expen under control even amid a chip shortage, rising costs for Nvidia’s graphics processing units (GPUs) and ever-changing licensing fees for AI models.
Frosst says those dynamics are still at play, allowing Cohere to be “more capital-efficient,” which is increasingly “of interest to investors.” Rivals with popular consumer-facing AI products, he said, use a lot of compute on “consumer applications and science projects.”
Although the sales cycle for enterprise AI can be longer, Frosst said, “the recurring business we’ve been able to create is something that’s really resonating with investors now.”
Competition is stiff and the technology is quickly evolving.
In October, Anthropic said its AI agents had the ability to use a computer like a human would in order to complete complex tasks. The feature, called Computer Use, allows its technology to interpret what’s on a computer screen, select buttons, enter text, navigate websites and execute tasks through any software and real-time internet browsing.
OpenAI reportedly plans to introduce a similar feature soon. And last year, executives from Microsoft, Meta and Google regularly touted their goals to push AI assistants to become increasingly productive.
Even without a consumer business, Cohere has to spend heavily on Nvidia’s costly GPUs, which are in huge demand for companies that are training models and running big workloads. In Cohere’s early days, the company secured a reserve of Google chips to help it pretrain its models. Over the past year, Cohere has moved more toward Nvidia’s H100 GPUs.
“We’ve increased our spend on them, because they’re working really well,” Frosst said.
WATCH: Cohere CEO Aidan Gomez on how his AI models make money for companies
Alice Weidel, co-leader of the far-right Alternative for Germany (AfD) political party, arrives to speak to the media with AfD co-leader Tino Chrupalla shortly after the AfD leadership confirmed Weidel as the party’s candidate for chancellor on December 07, 2024 in Berlin, Germany.
Maryam Majd | Getty Images
Elon Musk used his social network X to promote Germany’s far-right Alternative for Germany party, known as AfD, hosting a live discussion Thursday with party leader Alice Weidel, a candidate for chancellor, ahead of a general election on Feb. 23.
“I’m really strongly recommending that people vote for AfD,” Musk, who is CEO of Tesla and SpaceX in addition to his role at X, said about a half hour into the conversation. “That’s my strong recommendation.”
The AfD has been classified as a “suspected extremist organization” by German domestic intelligence services. The party’s platform calls for rigid asylum laws, mass deportations, cuts to social and welfare support in Germany, and the reversal of restrictions on combustion engine vehicles.
Thierry Breton, former European Union commissioner for the internal market, said in a Jan. 4 post on X directed at Weidel: “As a European citizen concerned with the proper use of systemic platforms authorized to operate in the EU … especially to protect our democratic rules against illegal or misbehavior during election times, I believe it’s crucial to remind you” that a live discussion on X would give AfD and Weidel “a significant and valuable advantage over your competitors.”
While AfD has amassed about 20% of public support, according to reporting from broadcaster DW, the party is unlikely to form part of a coalition government, as most other parties have vowed not to work with it.
AfD previously protested the build-out of Tesla’s electric vehicle factory outside Berlin, in part because the factory would provide jobs to people who were not German citizens.
Musk’s earlier endorsements of AfD, including tweets complimenting the party and an editorial in a German newspaper, have enraged European government officials. Musk, the wealthiest person in the world, has also endorsed far-right and anti-establishment candidates and causes in the U.K.
Political leaders in France, Germany, Norway and the U.K. denounced his influence, NBC News previously reported, warning that Musk should not involve himself in their countries’ elections.
Musk, who was one of President-elect Donald Trump’s top backers in November’s election, previously promoted Trump in a live-streamed discussion on X. Before that, he hosted a conversation with Florida Gov. Ron DeSantis, who lost to Trump in the Republican primary.
Weidel during Thursday’s talk asked Musk about what Trump might do to bring Russia’s war in Ukraine to a conclusion, as the president-elect has suggested he could quickly do.
Musk demurred.
“To be clear this is up to President Trump, he is commander and chief, so it’s really up to him,” Musk said. “I don’t want to speak for him but you know I do think that there is a path to a resolution but it does require strong leadership in the United States to get this done.”
Musk also weighed in on what he thought should be done in Gaza, which has been under attack from Israel since Hamas’ deadly incursion into Israel on Oct. 7, 2023.
“There’s no choice but to eliminate those who wish to eliminate the state of Israel, you know Hamas essentially,” Musk said. “Then, the second step is to fix the education so that Palestinians are not trained from when they are children to hate and want the death of Israel.”
“Then, the third thing, which is also very important, is to make the Palestinian areas prosperous.”
— CNBC’s Sophie Kiderlin contributed to this report.
President Donald Trump shakes hands with Microsoft CEO Satya Nadella during an American Technology Council roundtable at the White House in Washington on June 19, 2017.
Nicholas Kamm | AFP | Getty Images
Microsoft said Thursday that it’s contributing $1 million to President-elect Donald Trump’s inauguration fund.
The software maker is now more closely aligned with its highly valued peers in the technology industry. Google said earlier on Thursday that it’s donating $1 million to the Trump fund, and Meta offered the same amount in December. Amazon was reportedly looking to make a similar contribution.
OpenAI CEO Sam Altman said in December that he would contribute $1 million individually, and Axios reported last week that Apple CEO Tim Cook will do the same.
Elon Musk, Tesla’s CEO and the world’s richest person, has been advising Trump as he prepares to return to the White House following the inauguration later this month.
Microsoft also contributed $500,000 to the first inauguration fund for Trump’s first term and gave the same amount to President Joe Biden’s fund, a Microsoft spokesperson told CNBC.
Satya Nadella, Microsoft’s CEO, has met with Trump on multiple occasions, including over negotiations surrounding a possible acquisition of TikTok in the U.S. in 2020. Nadella also joined a Trump roundtable of technology executives from around the country in 2017.
Microsoft is hoping that under Trump, the U.S. will push artificial intelligence policy in a favorable direction.
“The United States needs a smart international strategy to rapidly support American AI around the world,” Brad Smith, Microsoft’s vice chair and president, wrote in a blog post last week.
WATCH: Microsoft to end 2024 with capital expenditures of at least $53 billion
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