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AI21 Labs, an Israeli artificial intelligence startup known for building its own large language models (LLMs), is in the process of raising a $300 million Series D funding round, according to a source familiar with the deal. The company has not disclosed its new valuation, but the round would bring its total capital raised to $636 million.
Founded in 2017 by Amnon Shashua (Mobileye), Professor Yoav Shoham (Stanford University, ex-Google), and entrepreneur Ori Goshen, AI21 is part of a growing cohort of companies developing proprietary LLMs as alternatives to models from OpenAI, Anthropic, or Google.
A Push for Reliable Generative AI
AI21's focus is on improving the dependability of generative AI systems in business environments. One of the company's main objectives is to reduce hallucinations—instances where models present incorrect information as fact.
In March, the company launched Maestro, a generative AI orchestration system designed to increase accuracy and reduce hallucinations. AI21 claims Maestro improves reasoning model accuracy to over 95%, while halving hallucination rates in enterprise use cases.
Unlike most AI startups that build on existing foundational models, AI21’s technology stack is built in-house. This approach is aimed at giving the company more control over performance, transparency, and data integrity—areas of increasing concern for enterprise clients and regulators alike.
Backing and Customer Base
AI21 has attracted support from some of the most influential investors in the sector. Its backers include Google, Nvidia, Intel Capital, Walden Catalyst, Pitango, SCB10X, Samsung Next, Comcast Ventures, and Ahren Innovation Capital.
On the client side, AI21’s technology is already in use by companies such as FNAC, Capgemini, and website builder Wix. The company positions itself as a provider of trustworthy AI tools for large-scale commercial applications—particularly for companies seeking more control over content generation and data governance.
Momentum in Israeli Tech and Global AI
The funding effort comes amid a surge of capital into artificial intelligence. More than $7 billion was invested in AI startups globally last month, representing around 30% of all venture capital funding, according to Crunchbase data.
Israel’s tech sector has also seen renewed investor interest. Local firms have raised over $12 billion so far in 2024—a 31% increase from last year—according to data from Startup Nation Central.
The AI21 round follows broader momentum in Israeli innovation, highlighted by Google’s recent $32 billion acquisition of Wix, its largest deal to date. That deal underscores the growing strategic importance of Israeli-founded tech firms across sectors, including AI and cybersecurity.
While the Series D is not yet finalized, AI21’s ability to attract capital from both leading institutional investors and strategic partners like Nvidia and Google reinforces its position as a serious contender in the enterprise AI space.
