Cohere, an AI startup, announces staff cuts following a $500 million funding round.

• On Tuesday, Cohere, an artificial intelligence startup founded by ex-Google AI researchers and backed by Nvidia, announced that it had cut approximately 20 roles.
• The company's valuation more than doubled from last year after completing a $500 million funding round with investors including AMD, Salesforce, Oracle, and Nvidia.
• Cohere has around 400 employees, and despite the layoffs, the company is still hiring in areas such as customer operations, partnerships, revenue, sales, product design, and modeling, as stated on its website.

On Tuesday, Cohere, an AI startup founded by ex-AI researchers and backed by, cut approximately 20 roles, as confirmed by CNBC.

Cohere, with approximately 400 employees, experienced layoffs after completing a $500 million funding round from investors such as Salesforce, Oracle, and Nvidia, which valued the company at $5.5 billion, more than double its valuation from the previous year.

Cohere is currently hiring in customer operations, partnerships, revenue, sales, product design, and modeling, as stated on its website.

Cohere, founded by ex-Google AI researchers and backed by Nvidia, has focused on generative AI for enterprise use rather than consumer chatbots, which have been the focus of the tech industry since OpenAI released ChatGPT in late 2022. In June 2023, Cohere raised $270 million at a $2.2 billion valuation, with both and participating in the funding round. Additionally, company executives have attended AI forums at the White House.

"Our recent financing has given us a clear vision for Cohere's future, which has necessitated some internal restructuring. We will continue to aggressively hire people as we work to provide companies with the most accurate, secure, and private multilingual AI solutions in the market."

Fortune first reported on the job cuts.

In 2023, the generative AI field experienced a significant growth, with a record $29.1 billion invested across nearly 700 deals, representing a more than 260% increase in deal value from the previous year, according to PitchBook. This technology has become a buzzword on corporate earnings calls and is automating tasks in various industries, including financial services, biomedical research, logistics, online travel, and utilities.

Some of Cohere's competitors in the AI arms race provide products for both consumers and businesses. OpenAI, for example, released ChatGPT Enterprise in August, while Anthropic made its consumer-facing chatbot Claude available to the public in July.

Martin Kon, the co-head of the company, stated in March that by focusing on enterprise AI, the company can maintain efficiency and control costs, even during a chip shortage, rising GPU costs, and fluctuating licensing fees for AI models.

Cohere's website lists Notion, Oracle, and Bamboo HR as current clients. According to Kon, many customers are businesses in banking, financial services, and insurance. In November, Cohere saw an uptick in customer interest after OpenAI's sudden and temporary ouster of CEO Sam Altman.

In March, Kon admitted that the evolving landscape of the hardware industry has posed ongoing difficulties. At the time, the company had been holding onto a stockpile of Google chips for over two years, which it had acquired in Cohere's early stages to aid in pretraining its models. Currently, Cohere is shifting its focus towards utilizing Nvidia's H100 GPUs, which are powering the majority of the most recent large language models.