Oracle is betting its AI future on a company called Cohere. Here's why this little-known startup is becoming OpenAI's chief rival.

Oracle is betting its AI future on a company called Cohere. Here's why this little-known startup is becoming OpenAI's chief rival.
Oracle founder, chairman and CTO Larry EllisonRobert Galbraith/Reuters
  • Oracle is offering generative AI to its customers based on tech from a startup called Cohere.
  • Oracle invested in Cohere but the startup has backing by other tech giants, including Salesforce.

Oracle is offering its enterprise customers a way to build their own generative AI apps without having to share their data in ways they may not want to do. But it will be using the technology offered by a startup that is not exactly a household name: Cohere.

Cohere is quickly becoming one of the few alternatives to the dominant player, OpenAI.

In August, the four-year-old Toronto startup raised a $270 million Series C, at a $2 billion valuation, from a host of VCs and big tech names including Oracle, NVIDIA, Salesforce Ventures, and SentinelOne. This round came after raising $170 million from some Silicon Valley VCs in addition to well-known AI researchers like Geoffrey Hinton, Fei-Fei Li and Pieter Abbeel, pitching in, the New York Times reported.

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Oracle will be embedding Cohere's generative AI technology into a bunch of its products and Cohere will be using Oracle's cloud to train, build, and deploy its generative AI models, Oracle chairman and CTO Larry Ellison said. That's not unusual. Oracle loves use products from the companies that use its cloud, like Zoom.

This partnership looks very much like how Microsoft has invested in and is using OpenAI.


There are several differences, however. One is that Cohere is designed for enterprise customers, meaning companies can use their own data to train their AI models, without sharing that data. For instance, Oracle, which now owns major healthcare cloud provider Cerner, has used its own data to train Cohere for medical and first-responder professionals, Ellison said during the quarterly earnings call with Wall Street analysts on Monday.

"Cohere and Oracle are working together to make it very, very easy for enterprise customers to train their own specialized large language models while protecting the privacy of their training data," Ellison said.

In contrast, OpenAI has famously scooped up data from everywhere to train its chatbots, like Reddit. And, when a user uploads information into OpenAI to ask ChatGPT to do a task, OpenAI uses that data to train its models for everyone's use. Users can opt out of that, but it's one of the reasons why companies warn their employees not to share data with OpenAI.

Cohere doesn't have an exclusivity contract with Oracle. Fellow investor Salesforce, for instance, already offers a service that embeds Cohere's chat capabilities into Salesforce. This is just one of the many AI tools Salesforce offers customers.

Oracle does have some of its own homegrown AI technology, and uses it for features like its "autonomous" database where its cloud software detects and automatically solves problems. But at the moment, Cohere is the only partner Oracle announced to power its generative AI services for customers, though this could change one day.


Ellison was quick to point out that lots of AI companies use its cloud, such as Adept AI, and that Oracle is building a huge computer with Nvidia to attract even more AI uses.

Perhaps the main reason Cohere has emerged as an alternative to OpenAI is that it was founded by Aidan Gomez. He was a research intern at Google Brain in 2017 when he co-authored a paper on a way of training AI models to improve their abilities to understand language. That method, called "transformers", has become the basis for many of the large-language, generative AI tech that has so enamored the industry today, including some models used by OpenAI.

Along with cofounders and fellow AI experts Nick Frosst and Ivan Zhang, Gomez founded Cohere in 2019 to bring "Google-quality AI to the masses," as Salesforce Ventures describes in a blog post. And Oracle wants to lead the way in that for its enterprise customers.