OpenAI Competitors Raise Billions in Funding

This week in AI, we look at the top OpenAI competitors that have recently raised billions to take on the leader in generative AI.

8 months ago   •   5 min read

By Mike Sak

This week in AI we look at OpenAI competitors that have raised billions in venture capital funding to building foundational models and take on the likes of ChatGPT.

The path for these mega corporate funding rounds was set when ChatGPT creator OpenAI received a $10 billion investment from Microsoft earlier this year, and is in talks to raise another funding round at a $90B valuation.

Since then, several OpenAI competitors have emerged or accelerated their fundraising with backing from some of the biggest names in the tech space.

Anthropic raises $4B from Amazon and in talks to raise another $2B from Google

First up, one of OpenAI's biggest competitors is Anthropic, a San Francisco-based AI startup that recently released its Claude AI suite. Claude is a direct competitor to ChatGPT and Anthropic is currently working on the next iteration of Claude which is believed to be ten times as powerful as current AI standards.

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It should come as no surprise then that Anthropic has been an attractive investment opportunity for companies looking to get exposure to generative AI and foundational LLMs.

Just last week, Anthropic received a sizeable investment of up to $4 billion from Amazon which will see the two sides working hand-in-hand to challenge the likes of Microsoft and OpenAI. The initial investment is worth $1.25 billion and will see Amazon take a minority stake in Anthropic. Amazon has the option to increase that initial investment to $4 billion in the coming years.

The partnership will also see Anthropic exclusively use Amazon's AWS cloud solutions platform and the new Amazon Bedrock platform that allows developers to build AI-based applications. Amazon is looking to improve customer experiences on its eCommerce platform as well as integrate AI into many of its other services.

It was also reported that Anthropic is in talks with Google to receiving a further $2 billion investment The Google parent company has been an investor in Anthropic since 2022. Alphabet has been one of the leaders in generative AI with the upcoming release of the Google Gemini AI platform that was co-created by the AI experts at DeepMind.

Finally, the news also comes on the heels of a $100 million investment in Anthropic from Korean telecom giant SK Telecom. The company is looking to integrate Anthropics AI platforms into its telecom services. Anthropic is working on another large language model that will specifically service telecommunications companies and their customers.

These latest investments are adding to the momentum behind Anthropic as the company is now commanding a valuation of between $20 and $30 billion. This is up considerably from the valuation of just $4 billion that Anthropic received in March.

Mistral AI raises largest seed round in European history

Earlier this summer, French AI startup Mistral AI set a European record for the largest seed round investment ever. The company certainly has a strong AI pedigree as it was founded by alumni from both Google DeepMind and Meta.

The company was only four weeks old at the time of the seed round and managed to raise $113 million at a valuation of $260 million.

Mistral AI is looking to "make AI useful" and has plans to launch its text-based generative AI platform at some point in 2024. The company recently released its first project, Mistral 7B which is a small language model with similar capabilities as Meta's Llama 2.

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While it does not offer the same options or scale as GPT, the requirements to use it are considerably less both financially and computationally. In fact, Mistral AI has made its first project completely free to use. For those who enjoy using Mistral 7B, there is a premium paid version that is available for a subscription.

AI21 Labs

Finally, A121 Labs is another OpenAI competitor that recently received an impressive valuation. After receiving a total of $155 million in Series C funding from the likes of NVIDIA and Google, AI21 Labs is seeking a valuation of about $1.4 billion.

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AI21 Labs has its own large language model called Jurassic-2 which is a direct competitor to ChatGPT and Claude. It is an Israel-based AI startup that is developing its platforms specifically for enterprise solutions. Aside from Jurassic-2, AI21 Labs also has its Wordtune chatbot and AI assistant that is used by millions of people around the world. While this started as a browser add-on, Wordtune has quickly evolved into a stand-alone AI platform. The recent investment from Google has seen AI21 Labs integrate Google's BigQuery analytics into its products.

Summary: OpenAI Competitors

As you can see, startup funding in the generative AI spaces is showing now signs of slowing down. Is this a sign of AI bubble mania...probably, but time will tell if these companies are able to justify these record breaking funding rounds and valuations.

TL;DR

  • 🏭 OpenAI had received a $10B investment from Microsoft and is under discussion for further funding at a $90B valuation.
  • 💼 Anthropic, one of OpenAI's biggest competitors, raised $4B from Amazon and is negotiating another $2B from Google.
  • 📊 Amazon's investment in Anthropic includes a minority stake and the possibility to increase its investment to $4B in the future.
  • 🚀 Mistral AI, a French AI startup, raised $113M in European history's largest seed-round investment and aims to launch its text-based AI platform in 2024.
  • 💸 AI21 Labs received a total of $155M in Series C funding from NVIDIA and Google, aiming at a $1.4 billion valuation.

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