Canadian AI startup climbs to $7 billion valuation after fresh funding

A Canadian artificial intelligence company backed by Nvidia has seen its worth climb to $7 billion after securing fresh funding, as companies around the world rush to add AI tools to their operations.

Cohere Inc. received $100 million from the Business Development Bank of Canada and Nexxus Capital Management as part of closing out its latest $500 million funding round.

Radical Ventures and Inovia Capital led the investment, joined by current backers including Nvidia Corp. and Public Sector Pension Investment Board.

The Toronto company plans to use the money to speed up work on its business-focused AI technology and expand its reach in both government and private company markets, according to a company statement.

Since starting in 2019, Cohere has focused on building large language models that it tailors for business use. The company goes head-to-head with bigger names like OpenAI and Anthropic PBC as these firms move beyond regular consumers to target business customers.

The company’s main product, called North, gives businesses and government agencies a way to connect everyday work tools like Slack and Google Drive with AI capabilities.

Users can set up automated tasks within their own computer systems. Unlike some rivals, Cohere does not offer computing power services, which keeps its costs lower.

Several major companies have teamed up with Cohere for their AI needs

Oracle Corp., Dell Technologies Inc., McKinsey & Co. and Royal Bank of Canada all work with the firm. In July, BCE Inc. made a deal to add Cohere’s AI models to its services. The Canadian government also signed a preliminary agreement to use more of the company’s technology in public offices.

Company leader Aidan Gomez said Cohere’s earnings doubled this year compared to last year. The firm now has around 450 workers spread across seven offices worldwide.

With total funding of roughly $1.6 billion, Cohere now ranks as one of Canada’s biggest startup companies. Another Canadian AI firm, Coveo Solutions Inc., went public in 2021 right before tech stock prices dropped sharply. While Coveo has had trouble bouncing back, its stock price has jumped about 45% this year.

Nvidia’s AI deal was a result of last-minute negotiations

The AI industry saw another major development this week when two industry giants announced a massive partnership.

Through quick talks, late-night phone calls and last-minute changes to contracts, the companies struck a $100 billion deal on Monday, just hours before one executive had to catch a flight to Abilene, a city of about 130,000 people located roughly 180 miles west of Dallas.

The timing worked out because both company leaders had been part of President Donald Trump’s official visit to the U.K. the week before, which allowed the president to learn about the agreement several days ahead of time.

One executive called the deal “monumental in size” when speaking to CNBC, marking a major shift in the tech world as money and power become more focused in the hands of the two companies at the center of the AI boom. On the other hand, some analysts are worried about an AI bubble, according to an earlier report by Cryptopolitan.