The "OpenAI of Europe" is Growing

Don't sleep on Europe's LLM startups Aleph Alpha, Mistral and Israel's AI21 Labs

Hey Everyone,

While in San Francisco a glitzy DevDay was happening, something even bigger happend in the world of artificial intelligence. And you probably didn’t hear about it. This is how biased the Western media is, and the Tech media industry in particular.

One of Europe’s key foundational LLMs startups got a lot more funding. Aleph Alpha, which has built its own large language models, raised $500 million in a series B round backed by Bosch, SAP and Hewlett Packard Enterprise. By European standards, this is a titanic Series B.

While the U.S. economy has been off to the races ever since massive stimulus, Germany and China have been in an economic slump. And yet, they still find a way to fund their leading A.I. startups.

Companies like Alph Alpha (Germany) and AI21 Labs (Israel) are really decent bets on Generative A.I. foundational model companies outside of the United States, and I think you can add Mistral (France) to that list as well where we also expect a lot rapid funding.

“A Sovereign AI strategy for the world’s best enterprises”

Aleph Alpha will use the fresh funds to invest in research on foundation models, advanced product capabilities and commercialization of its software. While Sam Altman thinks the world needs GPTs and a Store, more utilitarian companies like Alph Alpha, Cohere (Canada), AI21 Labs, Mistral and others are growing up without the Silicon Valley parades and so-called “word-of-mouth” hype that OpenAI receives.

$500 Million in Funding is a lot

The investors include Innovation Park Artificial Intelligence (Ipai), Bosch Ventures, the Schwarz Group, Berlin-based Christ&Company Consulting, Hewlett Packard Enterprise, SAP and Burda Principal Investments.

If you are an Enterprise that wants more control over your data and model, Alpha Alpha is the perfect solution. Founded in 2019, Aleph Alpha’s funding may be dwarfed by that of Microsoft-backed OpenAI ($11.3 billion), but the startup makes great play of the fact that its clients have “full sovereignty” over the implementation of AI into their businesses.

I’d suspect Aleph Alpha, Cohere and AI21 Labs are also a lot cheaper than GPT-4’s API.

Who they got funding from is as important. The consortium is led by the Innovation Park Artificial Intelligence (Ipai). The round was co-led by Schwarz Group (the owners of the Lidl supermarket chain) and Bosch Ventures. Other new investors include Berlin-based Christ&Company Consulting, Hewlett Packard Enterprise (HP) and SAP, as well as Burda Principal Investments. Existing institutional investors also participated.

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