Toronto’s AI darling, Cohere, officially entered the elite startup ranks with a massive $500 million funding round that pushed it to a $6.8 billion valuation, but the real headline is the company’s blockbuster executive hire.
The generative AI startup just poached former Meta AI chief Joelle Pineau as its new chief AI officer, one of the biggest moves in the ongoing AI talent wars. The Financial Post broke the news this week, reporting that Pineau will lead research and product development from Montreal, where Cohere opened its second Canadian office last month.
The executive steal from Meta adds to the startup’s buzz
The timing couldn’t be better for Cohere, which has been aggressively expanding enterprise AI offerings. The Financial Post reports that 85% of Cohere’s business comes from private sector deals with giants like Dell, Oracle, and Fujitsu. The executive coup signals Cohere’s intent to challenge OpenAI and Google in the enterprise market.
Founded just six years ago, Cohere has raised $1.5 billion total and catapulted past competitors like OpenAI with a valuation that’s jumped 200% since June 2023.
Tech giants are betting big on Cohere
The numbers tell a compelling story about Cohere’s rapid ascent in the AI arms race. Data from 17 months ago shows Cohere’s annualized revenue jumped from $13 million to $35 million between December 2023 and March 2024, nearly tripling in just four months. Major investors — including Cisco, AMD, Fujitsu, and Canadian pension fund PSP Investments — are clearly betting on Cohere’s enterprise-focused strategy.
Last year the company said it planned to double its 250-employee headcount, and as of last week, it had already hit 400 employees. Cohere’s partnership with Royal Bank of Canada in January to develop “North for Banking” demonstrates how it is carving out lucrative niches that OpenAI hasn’t dominated yet.
The billion-dollar question: Can Cohere actually deliver?
The reality behind Cohere’s sky-high valuation reveals some concerning gaps. Last year, the company ranked just sixth among major AI models, with its flagship Command R+ in a disappointing 37th position on quality benchmarks. And critics say Cohere performs poorly on Stanford’s HELM ranking, especially on price-to-performance ratios.
But investors seem unfazed. Global generative AI funding from venture capital reached $56 billion across 885 deals last year, with mega-rounds like Databricks’ $10 billion and xAI’s $6 billion proving that market exuberance continues, and Cohere continues to raise capital.
Can Pineau’s AI expertise can finally deliver the breakthrough models that justify Cohere’s massive valuation? Stay tuned.
Source: https://www.eweek.com/
