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
Chris Martin of Coldplay performs live at San Siro Stadium, Milan, Italy, in July 2017.
Mairo Cinquetti | NurPhoto | Getty Images
Astronomer‘s interim CEO said in his first public comment since unexpectedly taking over the role on Saturday that he hopes to move the tech startup past the viral moment that captured national attention last week.
Pete DeJoy was appointed to the top job due to the resignation of CEO Andy Byron, days after he was caught on video in an intimate moment with the company’s head of human resources at a Coldplay concert. Astronomer said over the weekend that it would begin a search for a new CEO.
“The events of the past few days have received a level of media attention that few companies — let alone startups in our small corner of the data and AI world — ever encounter,” DeJoy wrote in a LinkedIn post on Monday. “The spotlight has been unusual and surreal for our team and, while I would never have wished for it to happen like this, Astronomer is now a household name.”
Byron was shown on a big screen at the concert in Boston on Wednesday with his arms around Chief People Officer Kristin Cabot. Byron, who is married with children, immediately hid when the couple was shown on screen. Lead singer Chris Martin said, “Either they’re having an affair or they’re just very shy.” A concert attendee’s video of the affair went viral.
DeJoy helped start Astronomer in 2017, according to his LinkedIn profile, and had been serving as chief product officer since earlier this year.
In May, Astronomer announced a $93 million investment round led by Bain Ventures and other investors, including Salesforce Ventures.
“I’m stepping into this role with a wholehearted commitment to taking care of our people and delivering for our customers,” DeJoy wrote. He added that “our story is very much still being written.”
Astronomer is commercializing the open-source data operations platform Astro. DeJoy wrote that customers “trust us with their most ambitious data & AI projects” and that “we’re here because the mission is bigger than any one moment.”
Dylan Field, co-founder and CEO of Figma Inc., after the morning sessions at the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, on July 11, 2024.
David Paul Morris | Bloomberg | Getty Images
Design software company Figma on Monday published an updated prospectus for its initial public offering.
The company said it expects to sell about 37 million shares at $25 to $28 each. That would generate as much as $1 billion in proceeds, between the company and selling shareholders.
The IPO could value Figma, led by co-founder Dylan Field, a fully diluted valuation of $14.6 billion to $16.4 billion. Field plans to sell 2.35 million shares, which could be worth as much as $65.8 million.
In a 2024 tender offer, investors valued the company at $12.5 billion. In 2022, Adobe had agreed to acquire Figma for $20 billion, but the deal was scrapped after regulators objected.
The flow of technology companies joining U.S. exchanges has slowed since late 2021. Concerns over inflation and a recession made some investors less interested in backing fast-growing but money-losing companies.
But a few technology stocks have become available in recent months. CoreWeave went public in March, and Circle and Chime shares started trading in June.
Figma filed to go public on July 1, announcing plans to trade on the New York Stock Exchange under the symbol “FIG.”
On Monday, it provided preliminary results for the second quarter, showing $9.0 million to $12.0 million in operating income on $247 million to $250 million in revenue. That would imply year-over-year revenue growth of 39% at the low end and 41% at the high end. Growth in the first quarter exceeded 46%.
During the second quarter, Figma added clients and expanded business with existing ones. The company’s operating margin would be ticking up to 4% to 5%, up from 3% in the same quarter a year ago, based on the preliminary results.
Figma said it has authorized the issuance of “blockchain common stock” in the form of “blockchain-based tokens.” So far, though, Figma said it isn’t planning to issue this type of stock. In July, Figma disclosed investments in a stablecoin and a Bitcoin exchange-traded fund.
Mike Krieger, a co-founder of Instagram who is now chief product officer of artificial intelligence model developer Anthropic, has joined the board. Luis von Ahn, co-founder and CEO of Duolingo, is also joining the board, according to the filing.
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