DAVOS, Switzerland (Reuters) - Cohere, a Toronto-based startup developing artificial intelligence for businesses, is in discussions with investors to raise capital in the ballpark of $500 million to $1 billion, a person with knowledge of the matter told Reuters Friday.
The fundraising effort follows frenzied investment ignited by AI software application ChatGPT that saw AI startups garner a third of venture dollars in the United States last year.
Cohere announced in June it had raised $270 million in a funding round that valued it at $2.2 billion. The ability to generate myriad texts on command brought AI like in ChatGPT, so-called large language models, to the world's attention.
Cohere is competing with ChatGPT's creator OpenAI and startup Anthropic while focusing on business applications of AI, for instance making professionals more efficient at their jobs. Cohere has said it helped simplify how to search for infectious disease information for one specialist business customer.
Executives gathering at the World Economic Forum's annual meeting in Davos this week told Reuters they are eager to determine how to make money from AI.
Cohere is seeking funds for developing AI, recruiting talent and growing its sales activities, the person familiar with its capital raise told Reuters. The startup, founded in 2019, has worked to provide its technology through multiple cloud platforms and has avoided taking financing in the form of credits for its own cloud usage, the person said on condition of anonymity.
The Financial Times earlier reported the amount of capital Cohere was discussing with investors. Reuters could not determine the valuation.
Cohere CEO Aidan Gomez, who co-authored a seminal paper proposing a now-foundational architecture for AI, did not immediately respond to a request for comment.
(Reporting by Jeffrey Dastin; Editing by Susan Fenton)