In the last two years, the AI landscape has undergone a remarkable evolution, and at the heart of this transformation lies the rapid rise of generative AI, a type of AI technology that can produce text, images, audio, and much more, with simple commands known as prompts.
Notably, this advancement has given birth to an entirely new industry, as both startups and established giants dive into the potential of generative AI. With its ability to swiftly generate diverse content, generative AI has sparked innovation across sectors, from creative industries to data analytics. As companies harness this technology to streamline processes, engage customers, and develop cutting-edge products, it’s no surprise that the market dynamics have shifted.
The influence of generative AI on the industry landscape is profound, with established companies finding themselves propelled to new heights. Market caps of well-established players have soared as they embrace and integrate generative AI into their operations. As competition within this landscape intensifies, it’s becoming increasingly evident that the ability to leverage generative AI effectively is a defining factor in determining a company’s success and growth trajectory.
The transformative power of generative AI is not just confined to individual companies—it’s fostering an environment of innovation and technological advancement. With the convergence of creative exploration and practical applications, generative AI continues to shape the future, one prompt at a time.
When you approach venture capitalists (VCs) or speak with startup founders, you’ll likely hear a common sentiment: the past two years have been undeniably challenging, particularly in the realms of fundraising and valuations. The data indeed supports this observation. However, a stark contrast emerges when you shift your focus to the field of AI. Here, startups, especially those leveraging generative AI, appear to be operating in an entirely different paradigm.
The AI ventures have demonstrated an exceptional ability to secure substantial funding, often in the billions, while achieving multi-billion-dollar valuations. It’s as if the expected downturn hasn’t cast a shadow on their trajectory at all.
In this piece today, we explore the ten most highly valued AI startups in the world. They’ve raised billions of dollars between them and have a collective valuation of of over $50 billion.
Quick analysis: In the chart below, as shown, nine out of ten of these companies are based in the United States. There’s only one non-U.S. company, which is Canadian. There’s just one decacorn. The rest are unicorns. In addition to big names in VC and PE, like Tiger Global and Sequoia, some of the other very common and notable investors are big-tech firms like Microsoft, Google, Nvidia, and Salesforce. Four out of the top six companies are building their large language models and are directly competing with each other. Three companies, ranked 7, 8, and 9, are serving contact centers with their AI products. There’s only one GPT wrapper on the list.
Here are the the top ten biggest AI startups (or privately held companies – whatever you’d like to call them) in terms of valuation.
1) OpenAI – $29 billion
Total Funding: $11.3 billion
Notable investors: Microsoft
With the valuation of $29 billion, OpenAI is the most highly valued AI startup in the world. Its most notable investor is Microsoft that has put in a total of $11 billion in the company in a complicated deal. The company has raised a total of $11.3 billion to date.
Founded in December 2015 by notable technology leaders; Elon Musk, Sam Altman, Greg Brockman, Ilya Sutskever, John Schulman, and Wojciech Zaremba, OpenAI wants to create advance artificial general intelligence (AGI) in a manner that benefits all of humanity. The company as of today is focused on building Large Language Models, a type of artificial intelligence that is designed to understand natural language. They are trained on large sets of data and can generate output in different forms, including human-like-text.
The company unveiled GPT-3 or Generative Pre-trained Transformer 3, its breakthrough LLM with 175 billion parameters (the internal settings that govern how model processes data), in June 2020. What set GPT-3 apart from the previous models created by OpenAI was its sheer size (for context GPT-2 had 1.5 billion parameters) and its ability to product human-like text.
What propelled OpenAI into the mainstream spotlight, however, was the introduction of ChatGPT, a conversational chatbot built on top of GPT-3. Launched in November 2022, ChatGPT marked a significant milestone in AI advancement by bridging the gap between artificial intelligence and human interaction. Within a mere two months of its launch, the chatbot garnered 100 million users, establishing a new record as the fastest consumer internet product of its time to achieve this remarkable milestone. The company has launched many new features, products and LLMs since then.
The interesting thing about OpenAI’s history is that the company had originally started as a non-profit but moved to a capped profit structure in 2019 to be able to attract external investment and tech talent (with stock options). The model allows the company to offer capped return to its shareholders in case of a success. The returns beyond the set cap will be owned by the original non-profit entity of OpenAI. The for-profit entity, OpenAI LP, has OpenAI Nonprofit as its controlling shareholder.
Another intriguing aspect of the company’s structure and ownership is that its co-founder and CEO, Sam Altman, does not hold any ownership stake in the company.
OpenAI is aiming to bring in $1 billion as revenue in 2024. It makes money by offering a premium version of ChatGPT (priced at $19) and charging developers and companies for using its LLM APIs in their products.
2) Scale – $7.3 billion
Total funding: $600 million
Notable investors: Dragoneer, Tiger Global, Greenoaks
Scale (formerly known as ScaleAI) is the second most highly valued privately-held AI company in the world, with a valuation of $7.3 billion. The company has raised $600 million to date, with its last round of financing, a $325-million Series E, in April 2021. The backers of Scale include Dragoneer, Greenoaks, Tiger Global, Coatue, Index, Founders Fund, and Y Combinator.
Founded in 2016 by Alexandr Wang, Lucy Guo, and Brandon Zhang, Scale wants to accelerate the development of AI applications by providing high-quality training data. The services offered by the company, include, data annotation, data management, and machine learning operations which essentially helps teams deploy and manage their machine learning models in production. It claims to have completed over 7.5 billion annotations to date.
Scale’s customers include generative AI platforms, leading technology companies, and government agencies. The company also stands as a preferred partner for companies engaged in building Large Language Models (LLMs), including OpenAI, aiding them in training these models for their customers.
The San Francisco-headquartered firm uses an army of remote workers in Africa, Philippines, and different other parts of the world, to help it sort and label data for different AI models. It mainly does it through a subsidiary, Remotasks, which has faced criticism for offering low rates to these workers and occasionally delaying or withholding their payments.
The company, according to its CEO, was on track to do $100 million in revenue in 2021, when it raised its last financing round.
3) Anthropic – $5 billion
Total funding: $1.1 billion
Notable investors: SK Telecom, Google, Spark Capital
Anthropic was founded in 2021 by the former VP of Research at OpenAI, Dario Amodei, along with his sister Daniela, who held the position of VP of Safety and Policy at OpenAI. Additionally, the company was joined by at least nine other former OpenAI employees.
It has raised $1.1 billion to date, which includes a $100 million investment by South Korea’s SK Telecom, earlier this month. The company has very quickly grown to become the third highest-valued AI startup in the world, with a reported valuation of $5 billion. While the company itself hasn’t officially confirmed this valuation, multiple reputable media outlets reported its fundraising efforts at the $5 billion mark earlier this year. Notably, when the company eventually unveiled the details of its funding round, it chose not to disclose the specific valuation. Another media outlet had indicated a pre-money valuation of $4.1 billion.
The company wants to build Large Language Models (or in their words AI systems) that are reliable, interpretable, and steerable, “We develop large-scale AI systems so that we can study their safety properties at the technological frontier, where new problems are most likely to arise. We use these insights to create safer, steerable, and more reliable models, and to generate systems that we deploy externally, like Claude,” notes their website.
Claude, Anthropic’s AI assistant, made its debut earlier this year, accessible through both a chat-based interface and API. The company offers two Large Language Models (LLMs): Claude 2, their most potent model, ideal for tasks requiring complex reasoning, creativity, thoughtful dialogue, coding, and detailed content creation; and Claude Instant, a faster and more cost-effective model suitable for casual dialogue, text analysis, summarization, and document comprehension.
The access for both chatbot and APIs is limited at the moment. The chatbot is in open beta and business access for APIs is available for select partners.
4) Hugging Face – $4.5 billion
Total funding: $400 million
Notable investors: Google, Amazon, Nvidia
Hugging Face, which raised $235 million, earlier this month in form some of the biggest technology companies in the world, is now the fourth highest-valued AI startup in the world, with a valuation of $4.5 billion. The firm has raised a total of close to $400 million to date. Its investors include Google, Amazon, Nvidia, Salesforce, AMD, Intel, Qualcomm, Lux Capital, Sequoia, and Coatue.
Founded in 2016 by Clément Delangue, Julien Chaumond, and Thomas Wolf, Hugging Face originally wanted to build a chatbot for teenagers. It later completely pivoted in a different area of AI to become a platform for machine learning technologies in order to demcoratize machine learning.
They’re commonly referred as GitHub of machine learning as it offers developers to browse and use thousands of pre-trained machine learning models, engage with the rest of the community on the platform by sharing their own models, download datasets, and autotrain the models. The startup makes money by charging users $9 as monthly fee for a pro account and $20 per user for an enterprise account. It also offers hosting services for models – starting $0.06/hour.
The company, according to Forbes, has an annual revenue run-rate between $30 to $50 million.
5) Inflection AI – $4 billion
Total funding: $1.525 billion
Notable investors: Nvidia, Microsoft, Google
Founded in 2022 by tech heavyweights; LinkedIn’s co-founder Reid Hoffman, Google DeepMind’s co-founder Mustafa Suleyman, and former Principal Scientist of DeepMind Karén Simonyan, Inflection AI is an AI studio that aims to build a personal AI for everyone. Its first product, Pi (which stands for Personal intelligence) is an AI assistant that was launched earlier this year.
The company was reportedly valued at $4 billion in its massive $1.3 billion financing round just two months ago. The round was led by y Microsoft, Reid Hoffman, Bill Gates, Eric Schmidt, and Nvidia, taking company’s total financing to date to $1.525 billion. The valuation makes Inflection the fifth most valued private AI company in the world. It is also among the best-funded startups.
Pi is powered by company’s own LLM, Inflection-1, which was revealed by the company, in June. Inflection plans to make it available for developers soon through its conversational API. As the company is a vertically integrated AI studio, it does everything in-house for AI training training and inference.
The company claims that its LLM, Inflection-1, is the best model in its compute class, outperforming GPT-3.5, LLaMA, Chinchilla, and PaLM-540B “on a wide range of benchmarks commonly used for comparing LLMs.”
6) Cohere – $2.2 billion
Total funding: $445 million
Notable investors: Inovia Capital, Nvidia, Tiger Global
Cohere is the only non-US startup on this list. Headquartered in Toronto, Canada, Cohere was founded in 2019 by former Google Brain team members Aidan Gomez and Nick Frosst, along with Ivan Zhang. The company developes Large Language Models (LLMs) that can understand and generate human-like text, competing with the likes of OpenAI, Anthropic, and Inflection, with a particular focus on serving enterprises.
In its last round of financing, a $270 million round, in June, Cohere was valued at $2.2 billion. It has raised a total of $445 million to date, from investors like Nvidia, Oracle, Salesforce, Inovia Capital, and Tiger Global. Tiger Global has been reportedly in talks to discuss a part of its stake in the company that could push Cohere’s valuation to over $3 billion.
Just a month ago, the Canadian AI startup launched Coral, an AI assistant designed for businesses. Coral helps employees with various tasks, like answering customer questions and analyzing business data. It uses the company’s information and other sources to provide answers when employees ask questions. It can connect to more than 100 data sources in a company, like documents, databases, and more.
Coral, which is in a private beta right now, runs on the company’s latest Command model, which gets updated every week. Cohere’s model Command is also available for developers to use in their products through APIs.
7) Dialpad – $2.2 billion
Total funding: $418 million
Notable investors: Iconiq Capital, Softbank, Omers
Founded in 2011 by Craig Walker, John Rector, and Brian Peterson, Dialpad is an AI-powered unified communications and contact center platform for businesses that enables them to engage with their customers on different channels include voice, messaging, and video meetings.
Unlike most of the companies on this list, Dialpad didn’t start as an AI company. It evolved into one and now offers multiple AI-powered services to its customers. With the valuation of $2.2 billion, it is the seventh most highly valued private AI company in the world. It has raised a total of $418 million to date, including $170 million in its most recent funding round in 2021. Its investors include Iconiq, Softbank, Omers, Amasia, GV, Andreessen Horowitz, and Salesforce Venture.
The products of the company are used by over 7,000 brands, including the likes of Motorola Solutions, Netflix, T-Mobile, and Uber, the company claims on its website.
8) Asapp – $1.6 billion
Total funding: $400 million
Notable investors: Fidelity, Dragoneer
With a valuation of $1.6 billion, New York-headquartered Asapp is the eighth most valuable AI startup in the world. It raised $120 million in a Series C round from Fidelity and Dragoneer in 2021, taking its total financing to date to $400 million.
Founded in 2014 by Gustavo Sapoznik, Asapp offers different AI-powered products and services to contact centers to help them optimize operations, improve agent productivity, and improve sales productivity.
They claim that their services can help contact centers reduce their average handle time by 10 percent or more, cut time to proficiency in half, augment messaging agents and automate 70 percent of their responses, automatically summarize all customer interactions, and transcribe the calls with what they say is the world’s most accurate speech-to-text technology.
The startup likes to refer to itself as an AI research company that aims to advance AI for augmenting human activities to address real-world problems for enterprises, “Our current agenda includes significant work in the area of customer care. It’s an area with many problems and a wealth of data—an ideal place to innovate and apply artificial intelligence and machine learning. Through our research in task-oriented dialog, natural language processing, and speech recognition we enable high-impact performance gains for consumer companies. That’s not only meaningful for those companies, but for all of us as consumers as well,” notes Asapp’s website.
9) Cresta AI – $1.6 billion
Total funding: $151 million
Notable investors: Tiger Global, Sequoia
Cresta AI is also a startup focused on improving contact center operations with generative AI. Founded in 2017 by S. Zayd Enam, Sebastian Thrun, Tim Shi, Cresta provides AI-driven tools to contact centers to help them enhance the performance and efficiency of customer support and sales operations within these centers.
Its technology is designed to assist customer service agents by providing real-time guidance, automating routine tasks, and offering insights based on data analysis. Their goal is to improve agent productivity, reduce handling times, and enhance overall customer service quality.
“Generative AI powers Cresta’s Real-Time Intelligence Platform which empowers agents, managers, and leaders to work together in order to maximize revenue, increase agency efficiency, and most importantly – create exceptional customer experiences. Cresta analyzes complex statements, emotions, sentiments, and behaviors to gain a deeper understanding of customer conversations when compared to traditional tools used by contact centers,” notes the company’s website.
With a valuation of $1.6 billion, Cresta shares the eighth spot, coincidentally alongside Asapp, a company it also competes with, on AIbeat’s list of the world’s most highly valued AI startups. In its most recent funding round, a Series C, the startup raised $80 million led by Tiger Global, in March, 2022.
Cresta’s products are used by some of the leading businesses in the world, including, Hilton, IHG Hotels & Resorts, CarMax, Blue Nile, Earthlink, Intuit, and Porsche.
10) Jasper – $1.5 billion
Total funding: $131 million
Notable investors: Insight Partners, Foundation Capital
Jasper is the tenth, or technically ninth if we consider Asapp and Cresta as jointly at number eight, largest AI startup in the world by valuation. It raised $125 million less than a year ago at a valuation of $1.5 billion. It is also the highest valued AI startup in the category of GPT wrappers, which are companies primarily built using OpenAI’s GPT tech.
Founded in 2017 by Dave Rogenmoser, Chris Hull, and John Philip Morgan, Jasper was previously known as Proof. At that time, its primary focus was helping businesses enhance their website conversion rates through its product. However, in 2021, the startup underwent a pivot, introducing an AI writing tool named Jarvis AI. Subsequently, it underwent a rebranding and became the company we now know as Jasper. In their own words, Jasper is a creative AI assistant that can help any business create content in their own brand voice.
The startup offers three main tools. The first one helps users write content, including blog posts and social media content. The second one is a Chrome extension that offers users writing suggestions in apps like Google Docs and Gmail. The third is an AI image generator, called Jasper Art. Jasper also offers its tech through APIs.
The Austin-headquartered AI firm had claimed to have done $45 million in revenue in 2021 and was reportedly on track to bring in $75 million in 2022. In spite of raising a substantially large investment round, Jasper had to cut its staff a few months later in what it said was a move to reshape their team.