Cohere is on a roll! Its latest model, Command R+, has beaten GPT-4 on the Arena leaderboard and is now available on HuggingChat. 

Unlike OpenAI, Cohere focuses on enterprises rather than catering to consumers with conversational chatbots. “We do not have and never will have a cash-burning consumer chatbot,” said Martin Kon, the COO of Cohere.

Cohere offers several models in three categories: Embed, Command, and Rerank. Each category serves specific use cases and can be tailored to suit particular needs.

Cohere’s latest model, Command R+, will soon be available on Oracle Cloud Infrastructure (OCI) and Microsoft Azure, alongside Amazon Sagemaker.

Oracle’s Baby

Cohere’s relationship with Oracle is different from that of OpenAI-Microsoft. Gomez said that Cohere is independent of any cloud service provider, allowing it to deploy its model on any cloud, unlike OpenAI, which is limited to Microsoft Azure. Cohere works with a range of cloud platforms including AWS (Sagemaker, Bedrock), NVIDIA, and Google. 

“We think independence is extremely important, so we’re available on every single cloud platform you know—Azure, GCP, OCI, AWS—in addition to on-prem. You’re not getting locked into one stack, one cloud,” said Gomez on the sidelines of the World Economic Forum Davos, 2024.

“We’re not taking massive behemoth cheques from a single cloud provider that might lock us into one ecosystem or environment. We’re really trying to be independent and build something new for the world,” he added, indirectly taking a dig at OpenAI.

Kon echoed similar sentiments, saying that models need to be cloud-agnostic so that you can deploy them wherever you feel comfortable with your data and not be tied to a specific cloud or even on-premises.

Though Gomez said that Cohere is independent, it does share a cosy relationship with Oracle. Cohere has built its generative AI models on Oracle Cloud Infrastructure (OCI), which offers high-performance and low-cost GPU cluster technology.

Cohere has trained its models on Google’s TPUs since its inception and has recently diversified to also use NVIDIA’s H100s on OCI.

“The relationship with Oracle has been hugely impactful, both on the front of compute and providing the best supercomputers on the face of the planet, but also in terms of going to market together, creating new products together, transforming existing products, and bringing this technology to enterprise,” said Gomez.

“OCI generative AI service really lives up to our mission of building large language models for enterprise in a way that is hyper-protective of their data, completely secure,” added Gomez.

Cohere’s generative AI models are integrated into Oracle’s business applications, including Oracle Fusion Cloud, Oracle NetSuite, and Oracle industry-specific applications

Oracle recently added generative AI capabilities within the Oracle Fusion Cloud Applications Suite, which consists of applications designed to manage various aspects of a company, including finance, human resources, supply chain, sales, marketing, and customer service.

Will Oracle Buy Cohere?  

Recently, the OpenAI competitor has been in talks to raise $500 million at a valuation of about $5 billion. Last June, Cohere achieved a valuation of $2.2 billion following a $270 million funding round that involved investors such as Inovia Capital, NVIDIA, and Oracle.

Cohere has been struggling to generate significant revenue. The company generated about $13 million in annualised revenue at the end of last year, generating just over $1 million in monthly revenue. Meanwhile, OpenAI hit the $2 billion revenue mark in December 2023.

Cohere’s revenue is considerably lower than that of its competitors. However, the startup has informed investors that its sales pipeline, comprising potential contracts expected to close by the end of 2024, is valued at over $300 million. It’s not clear how much Oracle’s share in that is.

On the other hand, Oracle recorded a revenue of $13.3 billion, up 7% in Q3 2024. It  also signed a big Generation 2 cloud infrastructure contract with NVIDIA. 

“Oracle’s Gen2 AI infrastructure business is booming. That’s become pretty clear to everybody,” said Oracle’s chief technology officer, Larry Ellison, during the earnings call. 

“In addition to selling infrastructure for training AI large language models, Oracle is also completely reengineering its industry-specific applications to take full advantage of generative artificial intelligence,” he added. 

Oracle has developed a Clinical Digital Assistant for doctors, which it will deliver in Q4.  It automatically generates doctors’ notes and updates Electronic Health Records. 

Ellison also said that Oracle is building the largest data centers in the world. “We’re building an AI data centre in the United States where you could park eight Boeing 747 nose-to-tail in that one data centre. We are building large numbers of data centres,”  he said. 

“We’re building 20 data centres from Microsoft and Azure. They just ordered three more data centres this quarter… And there are other multi-cloud agreements that are being signed,” he added.

It wouldn’t be surprising if Oracle considered acquiring Cohere in the future if the AI startup struggles to generate significant revenue. However, Cohere’s decision to deploy its model on Microsoft Azure could potentially open up new revenue streams.

[Update] April 12, 2024, 9:15 a.m | The article has been updated to correct that Cohere works with a range of cloud platforms including AWS (Sagemaker, Bedrock), NVIDIA, and Google.