AI model provider Cohere raises $500M, valuation now $6.8B
The AI vendor rose to prominence during the same time period as OpenAI and Anthropic, but it seemed to have fallen behind. The new funding shows it still has a play in the AI market.
AI foundation model provider Cohere revealed on Thursday that it raised $500 million in its latest funding round, bringing its valuation to $6.8B.
Radical Ventures and Inovia Capital led the oversubscribed round, which included participation from AMD Ventures, Nvidia, PSP Investments and Salesforce Ventures. The new investment will help Cohere continue its plans to simplify tedious tasks in businesses and governments through agentic AI technology.
In addition to the new fundraiser, the vendor revealed that former Meta research head Joelle Pineau will serve as its chief AI officer. In a prepared statement, she said she will continue to build on the cutting-edge research the Cohere Labs team has been doing.
"Cohere was incredibly appealing to me because they are implementing AI in ways that fundamentally are changing how businesses and governments operate," Pineau said in the statement. "They are realizing the full potential of AI."
Cohere's position
The new funding and new AI chief serve as important markers for Cohere, especially because the vendor, which rose in prominence at the same time as OpenAI and Anthropic, had seemingly fallen by the wayside.
"A lot of people thought they were drifting out of being relevant in the last six months," said Paul Baier, CEO and co-founder of GAI Insights. "This puts them squarely back into the game."
Founded in 2019, the vendor found support from cloud providers such as Oracle. In 2023, Oracle invested in Cohere in a deal that mirrored Microsoft's investment in OpenAI and Google's investment in Anthropic.
While OpenAI has become one of the leading players in models, messaging and funding, and Anthropic has capitalized on coding, Cohere is still looking for its sweet spot, according to Nick Patience, an analyst at The Futurum Group.
If you've still got the enthusiasm that models are everything, then they are the logical play.
Nick PatienceAnalyst, Futurum Group
"It's raised a lot of money, and it talks about solutions in financial services and healthcare and areas like that ... but I think from the messaging point of view, it's not entirely clear where the sweet spot is," Patience said.
While Cohere is still trying to find that spot, the vendor still presents an opportunity compared with OpenAI and Anthropic.
"If you've still got the enthusiasm that models are everything, then they are the logical play," Patience said.
A chance to survive
Moreover, Baier said, as a vendor focused on the enterprise, Cohere has a chance to thrive.
"More and more companies want to 'own your intelligence' and have the automation of their cognitive tasks done either behind the firewall or in the private cloud that fits in with their data structure," he said. "Cohere shines at that."
He added that while OpenAI forces enterprises to upgrade the models that they're using when they move to the next generation of models, Cohere provides a choice for enterprises.
Cohere's appointment of Pineau is promising to investors because she came from Meta and was instrumental in developing the early generations of Meta Llama models, Patience said. This might mean that Cohere could have an opportunity in the open source market.
The vendor also has an opportunity in agentic AI. In January, it launched North, a low-code platform that enterprises can use to deploy agents across their business functions.
Patience said if Cohere can make a name for itself in either the open source or agentic AI space, that might bring immense opportunity for the vendor.
"There's a lot of appetite out there for on-premises and hybrid architectures," he said. "Not everybody wants to access the model through an API, and OpenAI is going down that route. But what if you don't want to do that, then where do you go?"
"The enterprise is a vast space, but there is a lot of appetite for hybrid and on-prem within that," he continued.
In addition to Pineau, Cohere welcomes Francois Chadwick as its chief financial officer to oversee economic and business operations.
Esther Shittu is an Informa TechTarget news writer and podcast host covering artificial intelligence software and systems.
