Cohere Joins AMD in AI Push

0:00Cohere has just hit a$7 billion valuation. This is just a month after they closed their raise and had a huge partnership with AMD. I'm going to be talking about basically their valuation, how they got here, who their competitors are, why some people are not like thrilled about this, which I think it's pretty phenomenal. And before we get into all of that, I wanted to mention if you want to build AI tools without having to know code, I'd love for you to check out my startup, which is called AIbox.ai. We've recently launched the beta of our NoCode AI app builder. where you essentially can go and type in a prompt into our Vibe Builder and tell it what type of tool you're trying to create, a newsletter generated, an article summarizer, a holiday memo generator.

0:45I've been making a whole bunch of different things, but you type it in and it will chain together all of the different AI models, build prompts, build a front-end UI, and create something incredible for you. So you can go check it out. You can also get access to all the top 40 different AI models where you can chat with them, like ChatGPT and Anthropic for only$20 a month. So all of that is over at AIbox.ai. go check it out. But let's get into the episode. So just on Wednesday, Cohere, which is really an enterprise AI model maker, I think a lot of people, they try to compare them to ChatGPT, but it's not really ChatGPT.

1:17They're specifically building AI models for the enterprise. They have raised an additional$100 million, which is really, really impressive. And this brought their valuation up to$7 billion. I'll also say that their round was oversubscribed. They announced in August, and it was an oversubscribed$500 million round. So it seems like, you know, they had a lot of appetite. They raised at a$6.8 billion valuation, oversubscribed to$500 million, and then it seems like they're like, all right, there's still a lot of demand, we'll go and take in another$100 million. So altogether, it was around$600 million that they raised, and a little bit, you know, somewhere between$6.8 billion and$7 billion was the valuation for all of that.

2:01Cohere also just announced a really interesting partnership. So of course, OpenAI just got a $100 billion investment from NVIDIA. And so, you know, OpenAI is kind of like a big competitor, even though they're not directly competing, because Cohere is more focused on the enterprise, but OpenAI obviously serves the enterprise as well. And so Cohere has actually just signed a deal with AMD, one of NVIDIA's big competitors, and it's also one of their investors. So right now, what the offer is that Cohere has, how they kind of set themselves apart, is that they have what they're calling a command family AI model.

2:37So they have command vision, translate reasoning models, and they can all run on AMD's Instinct GPU on an NVIDIA competitor, basically. And so it seems like they're, it's kind of interesting this time where you have these AI models that are not just trying to set themselves apart by, you know, who they're serving, but who they are using to power their models. And it seems by, you know, making an alliance with AMD, and I'm sure you can still run Coheron and NVIDIA GPU, but by making it specifically so you can run this on AMD's Instinct GPU, AMD is happy and they're going to invest money into your company.

3:13The same way that it feels like NVIDIA basically gives money to every major AI startup because they know they want these companies to be running their ai models on nvidia's gpus so cohere is obviously not abandoning support for nvidia's gpus um they're just adding support for amd which not every ai model it does that um what i will say that's interesting cohere actually was like one of the original front runners in the ai model race i remember talking about them at the beginning they were kind of up there with open ai anthropic you had cohere and a lot of people talked about how they sort of fell off.

3:45Aiden Gomez is their co-founder. He co-founded it in 2019. And he's also one of the authors on the famous Transformers paper that really is what started this whole big AI race where everyone is, you know, attention is all you need is the name of the paper, but is outlining how to make these LLM models. And he was one of the authors on this specific paper. And so a lot of people have very high hopes for Coher. I mean, they've raised, you know, a ton of money. They have a$7 billion valuation. What's interesting to me, though, is obviously like zero to$7 billion valuation in six years. That is absolutely insane, in my opinion.

4:21And if you had said that like 10 years ago, people would have been like, there's no way like that's incredible. That's an amazing company. But I think Cohere definitely gets really overshadowed by just how fast OpenAI is growing and also Anthropic. OpenAI was just recently had a valuation of $500 billion. So obviously this is, you know, really, really massive. They, they're, you know, they were in talks to sell about$6 billion in their stock and it was all happening in a$500 billion valuation. So when you have these$500 billion valuations and you're comparing this to $7 billion, people are like, you know, Coke here isn't growing as fast.

4:56And even if you compare that to Anthropic, they hit$183 billion valuation in their series F and they were actually raising 13 billion dollars there which is honestly it's pretty staggering to think you know you see cohere and they just raised 600 million which wow that's a lot of money um but you're comparing this to you know in the same month anthropic is pulling in 13 billion like it's it's just crazy these numbers are absolutely staggering so i think that's why uh people down like talk down on cohere but obviously it's growing in an incredible multiple it's it's a huge you know it's doing amazing things.

5:31What I will say, Cohere basically is always focused on the enterprise market. It markets itself as basically to enterprises where AI sovereignty is really urgent. So, you know, local control of your data and models, right? You're running a lot of these things yourself rather than putting them into, you know, the hands of a foreign entity. And so because of that, they've gotten a lot of interest from a bunch of people. The Business Development Bank of Canada, and by the way, Cohere is a Canadian company, but the Business Development Bank of Canada and Nexus Capital Management were new investors in this$100 million round they just pulled in.

6:07And I think it's interesting because Cohere definitely has a very unique market carved out for it. It's focusing very specifically on the enterprise. And, you know, I recently on the podcast talked to an investor in Cohere and asked them a little bit about their opinion on the company because they go here gets this reputation of like, oh, man, they kind of dropped off. And something that was interesting that he said was essentially he's obviously really proud of the company, but he said you just have to look at like the multiple and the growth rate of the company. And perhaps it is not as big as like the headline companies.

6:44Right. You have a handful of companies that are growing at insane rates, like maybe the top five. You got NVIDIA, OpenAI, Anthropic. And I mean, you could you could put products in this category to maybe even Google Gemini, right? Like you basically like the top five biggest that are going crazy. But Cohere is doing a it's addressing a very specific market, it's serving their customers, their customers are very happy with what they're doing. And they they're still growing and raising a lot of money. And so it might not be like the insane rocket ship that no one has ever seen before, right? Like opening eyes growth feels just absolutely unprecedented.

7:16So when you compare it to, that insane, completely unprecedented. It seems perhaps smaller, but for a regular company, they're getting a great return. Investors are happy. They're getting a great return and their customers are happy. They're getting a lot of value out of it. I am curious if Cohear could try to address a broader market and if they could get a lot of demand for it. I know for myself on my own platform, AIbox.ai, we basically, for 20 bucks a month, you get access to all of the top AI models and Cohere is we have the latest Cohere models on our platform. So like you can embed them into any products.

7:52I think Cohere could probably do a lot better job of putting a push and being more visible. It's just not a brand you see out there a lot. But at the end of the day, it's a powerful company. We I'll say like, basically, I can see usage metrics of our AI model. Cohere is not incredibly popular on our platform. Not a lot of people use it. And so I know they have a lot of specific like use cases where you might be running this locally on your own hardware for different high, you know, high concern industries like legal or health care. But at the end of the day, I think that I think they can still make a really big push to kind of have the general consumer use this.

8:29I think there's demand for more alternatives and more competition. And if they I think more than just focusing on a specific customer, like a specific, you know, the enterprise, for example, I think if they kind of focused on a specific vertical of the user and made their model better, not just like our hardware can support the enterprise, but if they made basically kind of like Anthropic where they made their model is literally better for writers, for example. Anthropik has a better tone. And also Anthropik's Cloud is better for coders. They have Cloud Code where they kind of built the Cloud Code and kind of this tool that developers can plug into their whole code base and it can write code for them.

9:10We use Cloud Code exclusively at AIbox because it's just so much better at understanding everything going on and OpenAI doesn't really have a strong competitor to it. And I know there's Codex, but I'll spare you the Cloud Code Codex debate for the moment. In any case, I think Cohear could focus on a couple of these areas, and I think they could see a lot of growth. I'll be curious to see what happens with them. But at the end of the day, do not count Cohear out. They're still alive and kicking. I'm happy to hear they're still raising more money. $600 million is impressive in the last little bit.

9:42So we'll keep following them and see how this company grows.