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AI start-up Fundamental has raised $255mn at a $1.2bn valuation and is partnering with Amazon to sell an AI model designed to analyse large databases, something traditional large language models struggle with.
The San Francisco-based start-up’s model is designed to crunch petabytes (1mn times a gigabyte) of data in company databases to predict trends such as demand, pricing and customer churn.
Founder Jeremy Fraenkel said the round was led by fintech investor Oak HC/FT alongside Battery Ventures, Elon Musk confident Antonio Gracias’s Valor Equity Partners and Salesforce Ventures.
Angel investors include Aravind Srinivas, chief executive of AI search start-up Perplexity, Brex co-founder Henrique Dubugras, Datadog’s Olivier Pomel and Wiz CEO Assaf Rappaport, whose company was recently acquired by Google for $32bn.
Fraenkel said the company has signed multiple “seven-figure contracts” with Fortune 100 companies in the oil and gas, finance and healthcare sectors that are using its Nexus model.
LLMs produced by Google, Meta and OpenAI are optimised for unstructured, sequential data such as text, images and video and struggle to digest and interpret billions of lines of non-sequential, non-linear relationships inherent in tabular data, Fraenkel added.
Fundamental will “help enterprise customers fill a crucial gap in comprehensive tabular data analysis”, said Dave Brown, vice-president of compute and machine learning services at AWS.
Amazon will offer the model through its AWS cloud service, providing security and using its existing contracts and paperwork with its business customers.
AWS and Fundamental hope this arrangement is attractive to companies that are concerned about allowing sensitive data to leave their networks because of the risk of intellectual property theft, or their information being used to train LLMs.
The agreement is non-exclusive, opening the door for Fundamental to work with rivals Google Cloud and Microsoft’s Azure. But the start-up’s ties with Amazon led to speculation that the cloud giant could seek to acquire Fundamental if the partnership is successful, said people familiar with the matter.
Amazon has not built its own frontier LLM, instead relying on partnerships with the likes of Anthropic, in which it has invested $8bn. It is also building a huge data centre for the start-up in Indiana. Amazon is reportedly discussing investing tens of billions in OpenAI.
Fundamental will use the new capital to pay for more cloud-computing capacity, buy more data to train its models and add staff.
Current employees include former DeepMind alumni Marta Garnelo, who is chief science officer, and chief technology officer Wojciech Czarnecki, who worked at Demis Hassabis’s AI drug start-up Isomorphic labs.
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