Software maker Snowflake Inc. could reportedly acquire Reka AI for more than $1 Billion, but discussions are currently ongoing, and sources indicate it is not a guaranteed deal.
Reka AI produces large language models, or software trained on vast expanses of the Internet, which can be used for various purposes, including image captioning and customer care chatbots.
Researchers from Google and Meta Platforms Inc., two divisions of Alphabet Inc., formed the company in 2022. Sources claim that during a 2023 financing round that included money from Snowflake's venture arm, it was valued at roughly $300 million.
Snowflake manufactures cloud-based data organization and analysis tools. The company views generative as a business accelerator, generating text, speech, or image content in response to user input.
In April, it released Arctic, its own big language model. Additionally, the business permits users to apply outside AI models from Reka to their Snowflake data. A representative for Snowflake reportedly declined to comment, while Reka was unavailable.
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Google-Rooted Snowflake Inc.
Earlier this year, Sridhar Ramaswamy, who spent fifteen years working at Google, assumed leadership of Snowflake as CEO. Before being appointed CEO, Ramaswamy served as Snowflake's senior vice president of AI. He started working for the company after it bought the AI-powered search engine Neeva last year.
This year, Snowflake's shares have lost 17%, trailing the 3.3% increase of the iShares Expanded Tech-Software Sector ETF. In 2023, numerous organizations reduced their software purchases, halting the company's revenue growth. This trend, known as cost optimization, also impacted cloud service providers Microsoft Corp. and Amazon.com Inc.
Big Tech's Startup Acquisitions
Tech behemoths have hurried to collaborate with or buy out companies operating in the cutthroat generative AI space. Microsoft recently invested in Inflection's AI development following the company's $1.3 billion fundraising round.
With Microsoft leading the pack, Inflection, a company focused on creating "more personal AI," gained significant funding from several stakeholders.
With Microsoft, Reid Hoffman, Bill Gates, Eric Schmidt, and newcomer NVIDIA leading the investment push, Inflection AI announced a $1.3 billion cash infusion. This brings the total amount invested in Inflection to $1.525 billion.
In collaboration with CoreWeave and NVIDIA, Inflection is kicking off a massive initiative to construct the world's largest AI cluster, featuring an astounding 22,000 NVIDIA H100 Tensor Core GPUs.
The most recent round of funding is intended to support the ongoing development of Inflection's first product, released in May. Pi is a new generation of AI that aims to be a kind and helpful friend by offering voice and text-based communication, helpful advice, and clear information.
In addition to releasing an open-source large language model, Databricks, widely regarded as Snowflake's primary rival, purchased AI startup MosaicML for $1.3 billion last year.
In September, Databricks was valued at $43 billion, whereas Snowflake's market value is over $55 billion.
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