100 million euros collected from investors.
(Photo: Getty Images)
Hamburg, Dusseldorf, Berlin, Frankfurt The Heidelberg start-up Aleph Alpha is about to collect more than 100 million euros from investors for the further development of its artificial intelligence (AI). Several people familiar with the processes said this to the Handelsblatt. The young company has developed an AI language model called “Luminous” and is thus competing with OpenAI and its ChatGPT.
According to the information, the chip companies Intel and Nvidia and the software company SAP are new venture capitalists as part of the second, so-called Series B round of financing.
The valuation of Aleph Alpha should therefore increase to around 450 million euros with the cash injection. Existing investors from Germany such as Earlybird or 468 Capital would also participate in the financing round, it said. When asked by the Handelsblatt, the companies involved did not want to comment. Intel has so far left a corresponding e-mail unanswered. The Handelsblatt had already reported on the interest of the US group.
“Important signal” for the German AI ecosystem
Aleph Alpha’s language model can create text and answer questions. Such Large Language Models (LLM) had caused a boom in AI applications in recent months, triggered by the presentation of the latest version of ChatGPT.
According to the company, Aleph Alpha’s Luminous system can compete with those of Google or OpenAI from a technological point of view. In the future, users should also be able to understand where the AI gets its information from. However, the start-up needs more capital for the necessary investments.
>> Read also: These are the most important AI start-ups in Europe
Intel will lead the round of financing with an investment of 25 million euros, those involved said. SAP will then follow with around ten million euros. The so-called Term Sheet, which contains essential details of the financing round, was signed in mid-June. This round is “an important signal for the German AI ecosystem,” said investor circles. Since the process has not yet been finally completed, changes are still possible in principle.
So far, Aleph Alpha, founded by business IT specialist Jonas Andrulis, has collected 28 million euros. The capital required to continue to be one of the world leaders is in the three-digit million range, Andrulis had already told the Handelsblatt in February. As a result, the intensity of competition among AI companies increased again. “Everyone I know who is involved in AI is under a lot of pressure right now,” Andrulis later said.
Praise from SAP boss Christian Klein
Concerns had recently arisen in the German digital scene about the ability of the AI company to convince financiers of itself and its language model. While AI start-ups were sometimes able to collect sums in the tens of millions in the early stages, Aleph Alpha’s search for investors took a long time.
The French start-up Mistral recently announced that it would receive 105 million euros. The team of former (Google) DeepMind and Meta employees didn’t even have a website.
This text is part of the large Handelsblatt special on artificial intelligence. Are you interested in this topic? All texts that have already appeared as part of our theme week
You will find here.
According to Aleph Alpha, investors had questions about the reasons for the delay. According to one investor, the coordination with small investors and the comparatively complex examination of the Intel team contributed to this.
SAP is already working with Aleph Alpha and wants to integrate its language model into its own products. At the OMR conference in Hamburg, SAP boss Christian Klein praised the start-up in May. The founders did “a great job in Heidelberg in their backyard,” he said. SAP wants to contribute “a lot” to their success.
More: When the software chooses the next start-up.