LiquidAI scores biggest Mass. VC deal for generative AI in 2024
MIT spinoff Liquid AI raised $250 million in venture capital backing on Friday, marking the largest artificial intelligence deal for any Massachusetts startup this year.
Now valued at over $2 billion, the Cambridge startup will use the money in an effort to keep pace with OpenAI’s ChatGPT, Google’s Gemini, and a host of other, larger rivals building generative artificial intelligence apps.
Inspired by the brain structure of a tiny roundworm, Liquid AI’s technology holds the same promise of writing, analyzing, and creating content as its rivals while using far less computing power. But first the startup will need to add staff and resources to develop applications for specific industries.
Friday’s deal was led by chip giant Advanced Micro Devices, a leading supplier of processors for AI, which also signed on as a strategic partner. AMD’s sales have benefitted from the AI boom but the chipmaker still trails far behind Nvidia, which makes the AI industry’s preferred processors.
The deal also follows Liquid AI’s October debut of its technology performing a variety of AI tasks while running on a phone, including uncovering questionable financial transactions and making up a list of AI-themed Halloween costumes.
After the debut, AMD chief executive Lisa Su, who has three degrees from MIT, said she was impressed by the technology. “The Liquid AI team’s unique approach to developing models will …make AI smarter, more efficient, and more accessible,” Su said in an email to the Globe.
Daniela Rus, director of MIT’s Computer Science and Artificial Intelligence Laboratory who helped found Liquid AI, said the startup would use the new funding to build AI apps that could run on a user’s own phone or computer without needing a cloud server “to unlock private and transformative solutions.”
The company’s technology grew out of research that Liquid AI chief executive Ramin Hasani and chief technical officer Mathias Lechner conducted to develop computer neural networks inspired by the brain of a worm known as C. elegans. The worm makes its way through the world despite having only 302 neurons in its brain, compared with close to 100 billion in the human brain.
Liquid AI’s deal is the eighth-largest venture capital funding in the state so far this year and the largest for any AI-related startup, according to PitchBook data. Battery developer Ascend Elements in Westborough raised over $600 million in February, ranking as the largest VC deal of 2024, and AI music generator Suno in Cambridge had the prior top AI deal when it raised $125 million in May.
Last December, Liquid AI raised $37.5 million in seed funding from high-profile investors led by Boston Celtics co-owner Stephen Pagliuca and San Francisco venture capital firm OSS Capital.
Aaron Pressman can be reached at [email protected]. Follow him @ampressman.