Recently, AI21 Labs, an artificial intelligence (AI) company, secured $300 million (approximately RMB 2.17 billion) in Series D funding led by Google and NVIDIA. This latest round brings the company's total funding to $636 million.

Established in 2017, AI21 Labs is headquartered in Israel and specializes in the development of large language models and natural language processing (NLP) tools.

AI21 Labs was founded by three successful entrepreneurs. Unlike many modern AI companies that rely heavily on young talent, the core team at AI21 Labs comprises seasoned veterans.

Amnon Shashua, the CEO of AI21 Labs, born in 1960, is a renowned computer scientist in Israel and has taught at Tel Aviv University for years. He previously founded Mobileye, a leading autonomous driving company, which was acquired by Intel for $15.3 billion in 2017. In 2022, Mobileye went public on the Nasdaq (currently with a market capitalization of approximately RMB 95.8 billion), and Shashua continues to serve as its president and CEO.

Co-founder Yoav Shoham, also a member of the post-60s generation, has taught at Stanford University since 1987 and founded the e-commerce company TradingDynamics in the 1990s. He later founded Katango and Timeful, both of which were acquired by Google. The other co-founder and co-CEO, Ori Goshen, was a co-founder of the web analytics company Crowdx and is responsible for product development at AI21 Labs.

Shoham and Goshen initially met through a nonprofit project promoting programming skills and discovered a shared interest and vision in AI. Shashua later joined them, saying, "Let's do this together, I'll invest some money," and the trio co-founded AI21 Labs. Shashua, with his extensive business success, took the helm of the company.

In its early days, the team maintained a low profile, focusing on developing advanced NLP technology. Their first product, Wordtune, an AI writing assistant that understands context and provides rewriting suggestions, was officially launched in October 2020. It quickly gained user recognition and was named one of Google's Best Chrome Extensions of 2021.

Prior to the emergence of ChatGPT in November 2022, AI21 Labs had already secured three rounds of funding, raising nearly $120 million. Rather than replacing AI21 Labs' products, ChatGPT's appearance made the company even more popular with investors, securing over $500 million in additional funding.

AI21 Labs' impressive list of investors includes industry giants such as Google, NVIDIA, Intel, and Samsung, as well as renowned investment institutions like Walden Catalyst, Pitango, SCB 10X, b2venture, TPY Capital, Ahren Innovation Capital, and Comcast Ventures.

Many may wonder why, after OpenAI decimated many text-based AI products (like Jasper AI and Grammarly), AI21 Labs has become even more favored.

Initially, AI21 Labs' original AI writing product, Wordtune, did not escape the shadow of ChatGPT, as its core functions—generating, polishing, and rewriting text—are ChatGPT's strengths. However, AI21 Labs responded swiftly by launching Wordtune Spices, an enhanced writing assistant that provides users with citations, statistics, analogies, and other content, along with source links, enhancing the credibility and information content of the text.

Yet, this was not enough. These so-called "leading" features were only temporary, and OpenAI could easily catch up. What truly kept AI21 Labs afloat was its full transition to enterprise AI services.

AI21 Labs' self-developed Jamba model supports a context window of up to 256,000 tokens, significantly more than OpenAI's GPT-4 and GPT-4-turbo models, which support 8,192 tokens by default, with some versions expandable to 32,768 tokens. This gives the Jamba model an advantage in scenarios such as legal analysis and long document processing.

Secondly, AI21 Labs' self-developed Maestro system reduces the "hallucination" rate by 50% and improves reasoning accuracy to over 95% through a "Mixture of Experts" architecture and State Space Model (SSM), making it more suitable for high-precision scenarios such as law, medicine, and finance. While OpenAI's GPT-4 excels in generative text quality, it still struggles with "hallucination" issues in specific domains (like legal interpretation and medical diagnosis).

Most importantly, AI21 Labs' models support on-premises deployment for enterprises, emphasizing data privacy and customization. They offer enterprise customers AI solutions that can run on-premises and on virtual private clouds, something that OpenAI does not provide. Industries with sensitive data, such as finance, healthcare, and law, as well as some large enterprises, have a high demand for private, high-performance large models. Notable customers of AI21 Labs include the retail enterprise Decathlon and the consulting firm Capgemini.

The cost of AI21 Labs' large models capable of handling long texts is extremely high, making them accessible only to enterprises. If these models were to be offered free of charge to users like OpenAI, the company would incur significant losses.

NVIDIA's investment in AI21 Labs is mutually beneficial. AI21 Labs has a substantial demand for high-performance computing, which directly boosts the demand for NVIDIA's high-performance GPUs. NVIDIA can also integrate AI21 Labs' models into its enterprise AI solutions and provide optimized versions through its NVIDIA AI Enterprise software. Both Google and NVIDIA aim to expand their influence in the enterprise AI market with the help of AI21 Labs.

The greatest inspiration AI21 Labs provides to Chinese AI startups is its ability to develop nuclear-level enterprise solutions.

The content of this article is for reference only and does not constitute any investment advice. The cover image was created by AI.