Snowflake Inc. is in talks to amass startup Reka AI for greater than $1 billion, increasing the software program maker’s effort to ship generative AI capabilities, based on folks acquainted with the matter.
Reka AI creates massive language fashions: software program skilled on massive expanses of the Web that can be utilized for a wide range of duties, akin to picture captions or as customer-supported chatbots. The startup was based in 2022 by researchers at Alphabet Inc.’s Google and Meta Platforms Inc. It was valued at round $300 million in a 2023 funding spherical, which included funding from Snowflake’s enterprise arm, based on a report from Reuters.
Snowflake makes instruments for organizing and analyzing information within the cloud and sees generative AI, which produces textual content, voice or pictures in response to person enter, as an accelerator for its enterprise. In April it launched its personal massive language mannequin, Arctic. The corporate additionally permits clients to make use of third-party AI fashions, akin to these from Reka, on their information inside Snowflake.
The discussions could not end in a deal, based on the folks, who requested to not be recognized as a result of the talks are personal. A Snowflake spokesperson declined to remark. Reka couldn’t be reached for remark.
Sridhar Ramaswamy, who spent a decade and a half at Google, took the reins as CEO of Snowflake earlier this 12 months. Ramaswamy was senior vice chairman of AI at Snowflake earlier than turning into CEO. He joined the corporate final 12 months when it acquired Neeva, a man-made intelligence-powered search engine.
Snowflake shares have fallen 17% this 12 months, lagging the iShares Expanded Tech-Software program Sector ETF, which has gained 3.3%. The corporate’s income progress slowed in 2023 after many firms diminished their software program purchases. This development, referred to as value optimization, additionally affected cloud suppliers akin to Amazon.com Inc. and Microsoft Corp.
Tech giants have been fast to companion with or purchase startups working within the aggressive discipline of generative AI. Microsoft has funded OpenAI’s efforts and not too long ago employed a lot of the Inflection AI employees. Qualcomm Inc. is partnering with semiconductor startup Ampere to work on AI-oriented chips. Salesforce Inc. has invested in a number of AI startups because it integrates the expertise throughout its customer-facing purposes.
Databricks, a startup typically thought-about Snowflake’s major competitor, additionally launched its personal open supply massive language mannequin and final 12 months acquired AI startup MosaicML for $1.3 billion. Databricks was valued at $43 billion in September, in comparison with Snowflake’s present market worth of round $55 billion.
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