Hey Everyone,
I will be posting less often between December 15th and January 8th due to the holidays.
In 2023 we have witnessed the biggest explosion for A.I. startups in the history of the internet.
This article is about Stealth startup Essential AI, founded by developers of Google’s breakthrough Transformer technology.
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While you may not be as interested in A.I. startups (Prospectus section) as I am, weâve covered so many impactful startups that have matured at an incredible pace. Today we will cover yet another one that has recently come out of stealth thatâs incredibly important.
Mistral itself is a good example of what can happen in just a few months. If you are ever going to be an AI startup watcher, 2023 and 2024 are the years you should be paying attention. I got you covered.
2023 Generative A.I. Startups
This is just a small sample for paid subscribers of what youâve missed out on:
Pika Labs
Sakana
Contextual AI
Hippocratic AI
X.AI
Imbue
Cohere
AI21 Labs
Building the Enterprise Brain
The A.I. startups that are founded in 2023 and 2024 will have a huge advantage, access to increased capital. This is why these two years are so important for the future of artificial intelligence.
So what ever happend to the Google DeepMind authors of that legendary Generative A.I. paper? Many of them have founded their own startups. Now we need to talk about Essential AI. While Essential is just a few months old, its founders, Ashish Vaswani and Niki Parmar, bring years of experience in the AI space.
We have been anticipating this stealth startup for quite some time, as this is a spin-off of Adept A.I. in a very real sense. I first read about Essential AIâs PR in Bloomberg, itâs not yet announced on TechCrunch so far.
One of the big mysteries of Generative A.I. startups is splinter startups of new A.I. startups like we saw with Anthropic coming out of OpenAI and now Essential AI out of Adept AI. In turns out in Generative A.I. credibility, if you were an author on this legendary paper, you are a bit like an A.I. celebrity. Such is the luxury of being Niki or Ashish.
Notice them in the back of this image center? Theyâre back! These are two the leads on that legendary paper (their names appear first).
What is the Enterprise Brain?
The company will use AI for corporate functions such as data analysis and promises to automate monotonous tasks, work that Chief Executive Officer Ashish Vaswani says is âharder than it should be.â The startup is calling its technology the âEnterprise Brain.â
Nvidia Strikes Again
The funding raise is not insignificant, $56.5 million in a series A round of funding. The investment has been led by March Capital with participation from tech giants Google, Nvidia and AMD. Franklin Venture Partners, KB Investment and Thrive Capital, which led the seed round of the company, also participated in the round.Â
Nvidia
AMD
Thrive Capital
Definitely some familiar faces here and more BigTech involvement than usual is especially noticeable in the round.
B2B Generative AI Trinity
So in my mind three companies really stand out in the B2B space:
Adept AI
Imbue
Essential AI
Due to their focus on the B2B space funding wonât be a problem.
Adept
Adept is an ML research and product lab building general intelligence by enabling humans and computers to work together creatively.
Imbue
We develop AI systems optimized for reasoningâimbuing computers with intelligence and human values so they can help us accomplish larger goals in the world.
In some sense we can call these AGI enterprise startups. And quite differently to how OpenAI is approaching things.
This investment also lifts Nvidiaâs incredible haul of Generative A.I. diversification in funding.
Major Companies Nvidia has Invested in in Generative A.I.
Essential AI
Mistral
Cohere
Inflection AI
Among the magnificent seven, Nvidia really stands out as investing in the future. Salesforce also gets high marks. So basically when Nvidia gets involved, you know that startup is going to be serious.
If some semblance of corporate AGI is on the way, we can expect to live in a more autonomous world circa 2035. A few companies will truly benefit from that development and these companies have a good chance of really being part of that.
These close collaborators at Google, where they co-authored a research paper proposing the Transformer architecture that set a new standard for language understanding in 2017 and paved the way for the Generative A.I. explosion.
I guess Ashish Vaswani wanted to be a CEO. Oddly no mention of the funding round yet on his LinkedIn. He was only at Adept Labs for around 11 months, which means Essential AI was instealth for about the last 13 months, founded roughly in December, 2022.
Itâs not clear what Niki Palmerâs role is there, perhaps Chief Scientist. Things have moved so fast in 2023, we already witnessed spin-off of relatively new A.I. startups.
Who Invested Early?
The company previously raised an $8.3M seed funding round led by Thrive Capital, with participation from investors Amjad Masad, Brad Gerstner, Conviction, Elad Gil, Francis DâSouza, David H. Patraeus, Gustavo Sapoznik, Jamie Montgomery, and Mei Zuo, for a total of nearly $65M in funding to date.
Elad Gil has been fairly prolific in early Generative A.I. startup funding.
You can find a list of some of their Angels here. Including Sarah Guoâs Conviction.
Itâs not clear how much Nvidia invested in the Series A.
While the co-founders are academics primarily, the PR also reflected this kind of minimalism.
Jamie Montgomery, co-founder and managing partner of March Capital, said the firm was âthrilledâ to invest in a company driving innovation in AI for business customers.
Jaimie at least shared the funding round on LinkedIn. Montgomery is taking a board seat at the company.
Itâs not not exactly clear what they think the Enterprise Brain is. The basics of what we know is that they are t is developing full-stack AI products designed  to increase productivity by automating time-consuming and monotonous workflows. A lot of corporate-AGI will actually be about automation of tasks.
Certainly this seems to be what Imbue and Adept AI are working on as well. But what differentiates these companies isnât abundantly clear in 2023. Itâs been a lot time since 2017, and a lot can change.
We will have to go to their bare bones website to learn more.
They have super similar branding to Adept AI, which is a bit peculiar considering that Anthorpic was nearly a carbon copy of OpenAI as well.
What will Essential AI Work On?
Essential AIâs mission is to deepen the partnership between humans and computers, unlocking collaborative capabilities that far exceed what could be achieved today.
To reinvent how enterprises work, we are developing full-stack AI products that quickly learn to increase productivity by automating time-consuming and monotonous workflows.
For instance, our technology will make data analysts 10X faster and give business users the tools to become independent data driven decision makers themselves. It will also identify the biggest risks and suggest improvements in organizations’ supply chains.
Commercial AGI is really just interoperable LLMs working together to handle different tasks. Now we have a bunch of really well funded U.S. startups with some really smart people working on this. Itâs all fairly theoretical and speculative, and Imbue and Adept AI have similarly ethereal vague goals.
But whoever does it the best of these three companies, is going to be pretty dominant. Niki came on about a month after Ashish. Itâs not clear if these folk are executives in their heart. March Capital is a pretty unconventional lead for a Series A, and their seed and Series A backers are noticeably diverse and diversified. They have more Angel investors than normal.
Itâs fairly interesting to see what the researchers of that famous paper are doing now.
With Character.AI, Cohere, Adept AI, Inceptive, Essential AI, Sakana, you begin to realize itâs all the same folk, and how rare the skills are to found these sorts of companies.
Character.AI
Cohere
Adept AI
Inceptive
Essential AI
Sakana
The GPT Billionaires
They will be worth Billions, and Google failed to retain a single one. That says a lot about Gemini and Google Deepmind today.
Itâs notable that the CEO of Essential AI back at Google, Vaswani worked on the design of the model in the early stages and programmed the whole thing. What was to become GPT-4. Incredible that Google kept LaMDA under wraps.
With a window like Generative A.I. in 2023 or 2024, you only have one shot. I think Ashish and Niki must have realized this sometime in 2022 as Adept AI was moving so fast.
Whatever âCommercial AGIâ will look like, we now know the Generative A.I. startups most likely to be involved, although there are still notable stealth startups still at the end of 2023. If RPA companies moved the needle like UiPath and Automation Anywhere, imagine those companies with Generative A.I. nativity? Thatâs what we are talking about here.
Can the Google 8 Manifest Corporate AGI?
This lame narrative of AGI or increasing productivity might also not go anywhere, it might prove too difficult. It might be too early, but everyone wants to start the next Microsoft.
Essential AI is developing full-stack AI products that quickly learn to increase productivity by automating time-consuming and monotonous workflows.
Their currently valuation is not known, but nearly $65 million isnât bad considering how young the startup is. In theory you would have hoped Inflection AI didnât put too much emphasis on Pi, and actually worked on this B2B side of things as well, but sadly that was not the case. ChatGPT gave them a wrong signal for how ready consumers were for that.
B2B AI that deals with task automation is the technology that will change white collar work, later rather than sooner. Itâs going to be an incredibly lucrative space.
Itâs hard to take the stealth out of the researcher! This Series A launch is one of the most awkward Iâve ever seen, and in stark contrast to the importance of what they are working on. Iâve noticed Imbue a lot more, thanks to platforms like Thursday Nights in AI. Ali does a tremendous job over at Outset Capital.
Google seriously lost some super stars, but the world is a better place already because they left and decided to cash out and do their own thing.
Top of the class. Illustration by Stephanie Davidson
I really urge you to watch these startups:
Character.AI
Cohere
Adept AI
Inceptive
Essential AI
Sakana
Google will also make sure their children and descendent companies are doing well. You will notice Google participated in the funding of Essential and will super-charge the growth of Chatacter.AI in 2024 like crazy (announcements coming soon)!
As for the automation B2B AGI startups, their future is less settled.
Cohere is easily among the best OpenAI competitors, and truly makes Canada proud. Iâve always said Toronto was an A.I. hub to watch and Cohere is proving it in 2023.
Inceptive is itself a pretty racy moonshot biotech startup and is perhaps the least known among these.
Since the founders of Essential are no longer at Adept AI, we can consider that not directly related to the Google 8. But thatâs at least five solid AI startups. Not a bad haul.
The brilliant people at OpenAI had to stand by their man Sam, because the payout is just so large in the tender offer coming. That the media depicted it as an OpenAI employee rebellion is absurd, even scientists just follow the money. When OpenAI has an $86 Billion valuation for a tender off, you bet you are sticking around at least to cash out. For all its talk of openness, OpenAIâs financials remain a black box.
In 2024 we will see so many great Open-source models and Iâve seen so many incredible AI startups in 2023 that I still want to talk about and cover.
Generative A.I. is still in the first inning, second batter, more or less. These are extremely early days. LLMs might not be a GPT, a general purpose technology, but they may be for some enterprise tasks. Some of these early Gen AI startups could become task automation companies and not just glorified research labs or only somewhat useful API providers.
The right business models and product-market fit with LLM products and APIs have yet to be found. That Adept AI, Imbue and Essential have highly vague terminology and goals doesnât help much and their funding rounds might not align with their corporate product development very well. The very idea of Corporate AGI that leads to more productivity across tasks is somewhat speculative. Itâs a moonshot and not at all a sure thing.
If the Google 8 lead to just one successful company, that alone would be a huge accomplishment. It could be Essential AI, but probably not.
It turns out attention is not all you need, you actually need good leadership.
It will need much more than GPT-5 and an army of Generative A.I. startups to build an Enterprise Brain that is self-driving so to speak. It wonât take years, it will take decades.
A flurry of funding doesnât actually mean anything. A Microsoft enterprise avalanche of copilots is not guaranteed to impress or raise productivity. The reality is being a hot shot researcher and being a founder are very different things.
There are so many LLMs coming into being, many will simply be forgotten. Itâs almost at the end of 2023 that we are already seeing LLM saturation in the space.
The cost of compute and the efficacy of fine-tuning needs to go significantly down before we see mainstream Enterprise adoption. Privacy, trust and safety and customization options need to be radically improved. Multimodal LLMs need to learn how to work together on tasks more. The area of AutoGPTs needs years of improved efficiency.
What we are talking about – Enterprise level task AGI, is not going to be likely something we see in the 2020s.
And yet, the explosion of Generative A.I. talent and funding provides a unique window for real innovation to occur in how we work with AI at work, in task automation and in the AI-human hybrid workforce.
Read More in  AI SupremacyÂ
