Artificial intelligence startup Cohere Inc. is in late-stage discussions to clinch a fresh round of funding that would raise the valuation of the company to US$5 billion.

Cohere is talking with investors about raising $500 million or more, according to a person familiar with the matter who asked not to be identified because the information is private.

The deal is expected to include major investors from Cohere’s $270 million Series C funding round last year. That round, which was announced in June, valued the company at more than $2.1 billion, Bloomberg News reported at the time. It was led by Inovia Capital and included a range of strategic investors such as Nvidia Corp., Oracle Corp. and Salesforce Ventures.

It’s unclear when the new financing round may close. Reuters previously reported on the talks. Cohere declined to comment on the deal. 

Founded in 2019, Toronto-based Cohere builds large language models — software trained on massive swaths of the internet to analyze and generate text — and customizes them for users. Companies can use its models to do things like summarize customer emails or help write website copy. Co-founder and Chief Executive Officer Aidan Gomez previously worked at Alphabet Inc.’s Google, where he was a co-author of a 2017 landmark paper in AI research titled “Attention is All You Need,” which led to advances in the ways computers analyze and generate text.

Cohere has been growing quickly, and an additional round of financing has been anticipated: In August — just months after raising its last round — Bloomberg reported that the company was working with banks to raise more money. In September, Cohere set up a second headquarters, in San Francisco.

The company was generating $22 million in annualized revenue as of March, which sped up with the rollout of a new conversational AI model called Command R earlier in the month. 

The new round is set to be co-led by Canadian pension investment manager PSP Investments, according to a report in the Information Wednesday.