While OpenAI burns billions chasing consumer glory and Anthropic tries to be everything to everyone, Cohere just raised $500 million at a $5.5 billion valuation by doing the opposite: zero consumer products, 100% enterprise focus, and customizable models instead of one-size-fits-all. The founders who helped invent the transformer at Google are proving that in AI, boring B2B beats sexy B2C. With revenue tripling in 90 days and both NVIDIA and AMD investing, this is either the smartest or luckiest strategy in AI. Spoiler: It’s not luck.
Valuation: $5.5 billion (2.5x jump from $2.2B in 2023)
Total Funding: $970 million
Revenue Growth: $13M → $35M ARR in 3 months
Employee Count: 250 → 500 (doubling in 2024)
The Investor Lineup That Tells a Story
Lead Investor: PSP Investments (Canadian pension fund) Strategic Investors:
NVIDIA (compute provider investing in customer)
AMD (hedging against NVIDIA)
Cisco (enterprise infrastructure play)
Fujitsu (Japan expansion)
Salesforce Ventures (CRM integration)
EDC (Canadian government backing)
The Hidden Signal: When chip makers invest in AI companies, they’re not betting on the company—they’re securing demand for their chips. NVIDIA and AMD both investing means Cohere is spending serious money on compute.
Predictable Revenue: Multi-year contracts vs monthly subscriptions
Lower Churn: 95% retention vs 30% for consumer
Higher Prices: $100K deals vs $20/month
Less Competition: OpenAI too busy with ChatGPT
Faster Profitability: Enterprise pays upfront
The Proof: Cohere’s revenue nearly tripled while OpenAI burns cash on consumer infrastructure.
The Founding Story Everyone Missed
The Transformer Origins
2017: Aidan Gomez, as a 20-year-old Google Brain intern, co-authors “Attention Is All You Need”—the paper that created transformers and enabled ChatGPT.
The Eight Authors: Only 3 stayed at Google. The rest founded billion-dollar companies:
Aidan Gomez → Cohere ($5.5B)
Noam Shazeer → Character.ai ($2.5B)
Others → Adept, Essential AI
The Pattern: Google trained them, then they left to compete. Classic innovator’s dilemma.
The Toronto Mafia Connection
The Network:
Geoffrey Hinton (Godfather of AI) introduces Gomez to Nick Frosst
Frosst (also ex-Google) becomes co-founder
Ivan Zhang (third co-founder) completes the technical trio
Toronto becomes AI hub outside Silicon Valley
Why It Matters: This isn’t a random startup. It’s Google Brain DNA with Hinton’s blessing.
The Technical Moat Nobody Talks About
Customizable > General Purpose
The Cohere Difference: While OpenAI gives you GPT-4 take-it-or-leave-it, Cohere lets enterprises:
While media obsesses over ChatGPT, Cohere quietly built a real business. Enterprise software isn’t sexy, but it pays.
Lesson 2: Focus Beats Features
By saying no to consumers, Cohere became best for enterprise. Trying to be everything means being nothing.
Lesson 3: Founders > Funding
The Transformer authors are AI royalty. Technical credibility opened every door. Pedigree matters in deep tech.
Lesson 4: Geography Is Destiny
Building in Toronto gave Cohere access to Hinton’s network, government support, and different talent pool. Sometimes being outside Silicon Valley is the advantage.
Cohere’s $500 million raise at a $5.5 billion valuation isn’t just another AI funding round—it’s validation that you can build a massive AI company by doing exactly what OpenAI doesn’t. By focusing exclusively on enterprise, building customizable models, and staying out of the consumer spotlight, Cohere proved that in AI, boring B2B beats sexy B2C.
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The Strategic Reality: While everyone copies OpenAI’s playbook, Cohere wrote their own. They’re not trying to build AGI or save humanity—they’re helping Oracle optimize databases and Fujitsu process Japanese. It’s not revolutionary, but it’s worth $5.5 billion and growing fast. In a market obsessed with consumer chatbots, being the enterprise infrastructure player is the contrarian position that’s printing money.
For Business Leaders: The lesson is clear—in emerging technologies, zagging while others zig creates massive value. Cohere found white space in a crowded market by being intentionally boring. They’re the Salesforce of AI: unsexy, enterprise-focused, and unstoppable. Sometimes the best strategy is to let others chase the spotlight while you quietly sign the contracts.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
