(Bloomberg) -- Artificial intelligence startup Cohere Inc. is releasing a new AI model Thursday that it says performs competitively against rivals like OpenAI on certain “business-critical” tasks at a fraction of the cost — heightening the race among AI companies to win corporate customers. 

Cohere says its new model, called Command R+, will be the startup’s most powerful technology yet, following the release of another, smaller but less capable version last month. Cohere is focused on business customers, which can use its AI technology for tasks like data analysis or writing marketing copy.  

Unlike many high-profile AI companies, Cohere opted not to build a consumer-facing business. “We do not have a cash-burning consumer chatbot; never have and never will,” said Chief Operating Officer Martin Kon. “Our lane is focusing on enterprise, and helping get our models into production at a massive scale. And this model is a huge step forward in terms of capabilities as well as distribution.” 

Cohere said its new technology makes advancements in a process called retrieval-augmented generation. The technique improves the accuracy of a chatbot, the company said, and allows the tool to provide citations for its responses, which it says minimizes “hallucinations,” or errors. The company also touted the model’s ability to perform tasks across 10 languages, and go beyond generating text to automate some business workflows.

It will also cost less than OpenAI’s GPT-4 Turbo model, it said. Cohere’s technology doesn’t perform as well as OpenAI and Anthropic’s most advanced models across the board, but the company says it’s better at certain business functions such as answering questions and summarizing with citations. 

Cohere’s models will be hosted first on Microsoft Azure, and will be made available on Amazon Web Services and other platforms in the coming weeks. The startup counts McKinsey & Co., Accenture Plc and Oracle Corp. as current customers.

Founded in 2019, Toronto-based Cohere is building large language models — software trained on massive swaths of the internet to analyze and generate text — and customizes them for users. 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.

The company is seeking to raise a significant sum from investors — $500 million or more at a $5 billion valuation, Bloomberg reported last month. The startup generated $22 million in annualized revenue as of March. Kon said that Cohere has increased revenue by 60% in the first 10 weeks of 2024, with a majority of that growth coming in the last month, in large part due to enterprise customers’ interest in its new models. 

©2024 Bloomberg L.P.