Science & Technology

German Companies Invest Over $500 Million In AI Startup Aleph Alpha

Aleph Alpha GmbH, a startup operating in the sphere of artificial intelligence, and striving to create a European competitor to large language models developed by OpenAI and Google, managed to raise investment funds for more than $500 million from a consortium of industrial giants and financial investors.

German Companies Invest Over $500 Million In AI Startup Aleph Alpha

Schwarz Group and venture capital unit Robert Bosch GmbH joined a group of seven new investors in a funding round that included SAP SE and American software company Hewlett Packard Enterprise. The relevant information is contained in the startup’s statement, which was published on Monday, November 6.

At a press conference on Monday, German Vice Chancellor and Economy Minister Robert Habeck described investment as a strategic national priority. According to him, the idea of Europe having its sovereignty in the artificial intelligence industry is extremely important. At the same time, he noted that no one will benefit from the situation when the mentioned region has the best system for regulating the process of creating, using, and distributing AI, but at the same time, there are no companies of the appropriate specialization.

The investors who provided funds to Aleph Alpha stated that they have certain obligations for joint business development with the startup, but did not go into details about this. A German research center, an artificial intelligence innovation park supported by the local government, Christ & Company Consulting, and Burda Principal Investments also participated in the funding round.

There is currently no data on the valuation of Aleph Alpha

The startup held its previous fundraiser in 2021. Then the company managed to raise investments for €23 million. This result was overshadowed by the more significant successes of competitors, who received an amount of funds exponentially exceeding the result of Aleph Alpha. In this case, huge financial injections are an unavoidable necessity for AI, which is a technology that requires expensive computing power. For example, an American startup of a similar specialization, Anthropic, is currently negotiating to raise $2 billion in investments. Before that, the company received $4 billion in funding from Amazon.

Aleph Alpha was founded in Heidelberg by Jonas Andrulis, a former SAP and Apple engineer. The developments of this startup is based on the technology of a large language model, similar to ChatGPT. At the same time, Jonas Andrulis created apps for European enterprises. These digital products provide security and protect data privacy.

Anthropic, OpenAI, and Google have also expanded their offerings to create artificial intelligence for businesses in the United States and Europe.

European startups operating in the machine intelligence industry are increasingly declaring their desire to compete with American developers of advanced technology. For example, the French firm Mistral thinks and perceives itself in the appropriate status. This company, which is at an early stage of existence, in 2023 raised investment funds for $113 million following the results of the initial round of financing. The startup positions itself as a European alternative to Silicon Valley.

Claude Ritter, a partner at Cavalry Ventures, says that until now there has been no the capital of advanced technologies in Europe. At the same time, he said that after the appearance of DeepMind, Mistral, and other companies that specialize in carrying out activities in the artificial intelligence industry, there were signs that certain processes were taking place in this region. According to him, there is a greater interest in governments, which France doubles. Probably, in this case, it implies a willingness to provide state support for the development of AI in Europe.

Jonas Andrulis stated that scaling up to the size of a large company was never his goal. He also expressed a desire to contribute to ensuring technological sovereignty. Its goal is not scale, but opportunity.

As we have reported earlier, Paxton AI Raises $6 Million for Legal Research and Drafting Platform.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.