Cohere co-founder sees big AI opportunity in enterprise, happy to stay out of ChatGPT’s way
Omar Marques | Lightrocket | Getty Images
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
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event on Wednesday, Sept. 25, 2024.
Bloomberg | Bloomberg | Getty Images
Meta shares hit a record high on Monday, underscoring investor interest in the company’s new AI superintelligence group.
The company’s shares reached $747.90 during midday trading, topping Meta’s previous stock market record in February when it began laying off the 5% of its workforce that it deemed “low performers.”
Meta joins Microsoft and Nvidia among tech megacaps that have reached new highs of late, all closing at records Monday. Apple, Amazon, Alphabet and Tesla remain below their all-time highs reached late last year or early this year.
Meta CEO Mark Zuckerberg has been on an AI hiring blitz amid fierce competition with rivals such as OpenAI and Google parent Alphabet. Earlier in June, Meta said it would hire Scale AI CEO Alexandr Wang and some of his colleagues as part of a $14.3 billion investment into the executive’s data labeling and annotation startup.
The social media company also hired Nat Friedman and his business partner, Daniel Gross, the chief of Safe Superintelligence, an AI startup with a valuation of $32 billion, CNBC reported on June 19. Meta’s attempts to buy Safe Superintelligence were rebuffed by the startup’s founder and AI expert Ilya Sutskever, the report noted.
Wang and Friedman are the leaders of Meta’s new Superintelligence Labs, tasked with overseeing the company’s artificial intelligence foundation models, projects and research, a person familiar with the matter told CNBC. The term superintelligence refers to technology that exceeds human capability.
Bloomberg News first reported about the new superintelligence unit.
Meta has also snatched AI researchers from OpenAI. Sam Altman, OpenAI’s CEO, said during a podcast that Meta was offering signing bonuses as high as $100 million.
Andrew Bosworth, Meta’s technology chief, spoke about the social media company’s AI hiring spree during a June 20 interview with CNBC’s “Closing Bell Overtime,” saying that the talent market is “really incredible and kind of unprecedented in my 20-year career as a technology executive.”
An electric air taxi by Joby Aviation flies near the Downtown Manhattan Heliport in Manhattan, New York City, U.S., November 12, 2023.
Roselle Chen | Reuters
Joby Aviation stock soared about 12% as the flying air taxi maker got closer to launching a service in the United Arab Emirates.
The electric vertical takeoff and landing, or eVTOL, company said Monday that it delivered its first aircraft to the UAE and has completed piloted flight tests as it readies for a 2026 launch in the region.
“Our flights and operational footprint in Dubai are a monumental step toward weaving air taxi services into the fabric of daily life worldwide,” said founder and CEO JoeBen Bevirt in a release. He called the Middle East nation a “launchpad for a global revolution in how we move.”
Joby’s planned launch in the UAE was announced in February 2024 as part of an agreement with Dubai’s Road and Transport Authority. The deal included exclusive rights to conduct air taxi service in Dubai for six years.
As part of the project, Joby said in November that it began building one vertiport at Dubai International Airport, with three additional locations slated for Palm Jumeirah and Dubai’s downtown and marina. Joby also announced an air taxi agreement with three Abu Dhabi government departments in 2024.
The California-based company has made other expansion moves in the Middle East. Shares jumped earlier this month after Saudi Arabian firm Abdul Latif Jameel announced a roughly $1 billion investment for up to 300 eVTOLs. The firm participated in Joby’s Series C funding round.
Joby shares have surged more than 32% this year, swelling its market capitalization to over $9 billion.
Demand for air taxis, which take off and land similar to helicopters, has gained momentum in recent years. The service faces regulatory and safety hurdles but has been lauded for its ability to cut traffic congestion and slash emissions.
Earlier this month, President Donald Trump signed an executive order that included a pilot program for testing electric air taxis.
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