The tsunami of capital flowing into the Bay Area and aimed at the generative AI boom is being delivered in big buckets, with $100M setting the standard for early-round antes—and the ceiling—or is it just another floor?—measured in billions.
In one two-day span in the last week of June, two $100M funding rounds were announced by generative AI startups and a mega-round well in excess of $1B was the haul for a chatbot developer who is building a personal assistant bot backed by a collection of tech legends.
The biggest funding bonanza by far was the $1.3B raised by Inflection AI, the chatbot developer based in Palo Alto that was launched by the founders of LinkedIn and DeepMind.
Inflection will use the funding to build out its AI-powered personal assistant, known as Pi. The startup is partnering with CoreWeave and Nvidia to build what it says will be the world's largest AI computing cluster—let's just call it the largest AI brain to date—a neural network that will run on 22,000 of Nvidia's AI-programmable chips.
The mega-round to fund the mega-brain was co-led by an all-star team of tech titans, including Microsoft founder Bill Gates, former Google CEO Eric Schmidt, LinkedIn co-founder Reid Hoffman, as well as Microsoft Corp. and Nvidia, according to Forbes, which said the round had increased Inflection's valuation to $4B.
Inflection's new round was delivered in cash and cloud services credits, according to Reuters.
Hoffman, a former board member of ChatGPT pioneer OpenAI, and Mustafa Suleyman, a co-founder of DeepMind Technologies—before it was acquired by Google—and Karen Simonyan formed Inflection at the end of last year.
"Personal AI is going to be the most transformative tool of our lifetimes," Suleyman said, in a news release.
The latest entry in the $100M per round sweepstakes is Celestial AI, a developer of chip connection technology based in Santa Clara.
Celestial has introduced what it is calling a Phonic Fabric system, which uses beams of light instead of electrons to transmit data between chips and between chips and memory modules, overcoming the constraints of electric-based data connection on the computing performance of AI models, Bay Area Inno reported.
IAG Capital Partners, Koch Disruptive Technologies and Temasek's Xora Innovation Fund led the Series B round for the startup. Samsung Catalyst, Smart Global Holdings, Porsche Automobil Holding SE, The Engine Fund, imec.xpand, M Ventures and Tyche Partners also participated in the deal, the report said.
Celestial is planning to license its chip connection tech to chip and memory makers and data center operators, CEO Dave Lazovsky said, in a statement. The startup has raised more than $160M in two rounds of VC funding.
Also joining the $100M mega-round tier was Typeface Inc., a developer of AI-powered marketing tools based in Palo Alto. Salesforce Ventures led the Series B round for Typeface; other investors included Lightspeed Venture Partners, Madrona, GV (Google Ventures), Menlo Ventures and Microsoft's venture arm M12.
Typeface has announced that its software will be integrated into Salesforce's new Marketing GPT product. The company also says it is partnering with Google Cloud and Microsoft Azure's cloud platforms.
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