The artificial intelligence (AI) industry is experiencing a surge in funding, with San Francisco-based startups attracting significant investments. Databricks announced a $8.6 billion Series J round, while Perplexity AI secured $500 million in venture funding, valued at $9 billion.
Huge sums of money continue to flow into the artificial-intelligence industry, and specifically to San Francisco-based startups. Databricks announced Tuesday it had already raised $8.6 billion for its Series J financing out of a targeted tally of $10 billion. Meanwhile, Bloomberg reported Wednesday that Perplexity AI closed a $500 million venture round earlier this month at a $9 billion valuation. Both businesses operate in the burgeoning AI sector.
Databricks offers data storage and analysis services that are customized for AI companies. Perplexity offers an AI-powered search engine that operates like a chatbot, attempting to offer direct answers to users’ questions rather than returning a list of links. Until recently, Perplexity’s round likely would have been one of the biggest of the year. But the surge of interest and investment in AI over the last two years has led to a series of multibillion-dollar venture deals, such as that being raised by Databricks. Should that company hit its funding target, Databricks’ round, which values it at $62 billion, would tie with OpenAI’s from January 2023 for the second-largest venture financing ever, according to data from PitchBook. Only Juul’s $12.8 billion deal in 2018 was larger. Databricks, which was founded in 2013, said it plans to use part of the money it’s raising to repurchase shares from past and present employees. Traditionally, startup employees have had to wait until their company goes public to cash in their shares. But with few initial public offerings in the tech sector over the last three years, startups have increasingly been turning to investors in private markets to buy shares from their employees. The new funding round would bring to $14 billion the total amount Databricks has raised, according to PitchBook. In addition to buying up employee shares, the company plans to use its new funds on marketing, developing new AI products and acquisitions, it said in a press releas
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