AI model startup Reka raises $50 million led by DST Global Partners

4:27 pm Tuesday, June 27th, 2023

By Krystal Hu

(Reuters) -Reka, an AI model startup founded by former researchers from Alphabet’s DeepMind, has raised $50 million in a fresh round of funding from investors including Yuri Milner’s DST Global Partners and Snowflake, the companies told Reuters.

The valuation of the deal was not disclosed. A source familiar with the matter said it valued Reka, which launched last year and has no revenue yet, at about $300 million.

Reka focuses on building large and specialized AI models for enterprise customers. Snowflake, which invested in the company, also announced a partnership to allow users to run third-party model providers like Reka within their Snowflake account.

“The bigger opportunity is how we take some of these smaller, more customized models and be able to bring them to run inside Snowflake so that we can give customers the guarantee that if you’re using this model, the privacy of your data is guaranteed,” said Christian Kleinerman, senior vice president of product at Snowflake, which also announced a partnership with Nvidia to give enterprises Nvidia’s software stack to build AI models.

The partnerships came as Snowflake competitor Databricks acquired AI model training company MosacicML in a $1.3 billion deal on Monday.

Reka will use the funding to acquire computing power from Nvidia, as well as build a business team, according to chief executive Dani Yogatama.

Reka enters a crowded field of building large language models for enterprise uses, as companies race to figure out how to adopt the AI system that powered the popularity of ChatGPT into corporate settings to increase efficiency.

Yogatama said Reka has built both large models and proprietary model distillation technology to personalize models for specific use cases. Its models support text, image, video and structured data.

“I think small models are going to represent a massive paradigm shift as enterprises are getting more serious about deploying AI models at scale,” said Rob Toews, partner at Radical Ventures, which invested in Reka.

(Reporting by Krystal Hu in TorontoEditing by Mark Potter and Anna Driver)