While analysts debate whether high investment and valuations in the AI space are causing: a bubble reminiscent of the Internet bubble of the 1990sa startup that has been operating for less than six months is looking for a valuation in the billions.
Cognition Labs is reported to be an AI startup founded in November that is building an AI tool for writing code it is seeking a valuation of up to $2 billion in its current fundraising round– reports the Wall Street Journal. Earlier this year, the startup was valued at $350 million following a $21 million Series A round led by Founders Fund founded by Peter Thiel. The fund is reportedly planning investments in the current round. If Cognition Labs ends its current round at a $2 billion valuation, its valuation will augment sixfold in just a few weeks. The startup also reportedly rejected offers worth $1 billion.
The startup that launched what it calls “the world’s first fully autonomous AI software engineer,According to reports in March, Devin only started working on the product last year and is currently not generating any real revenue. According to the startup, its product “can plan and execute complicated engineering tasks requiring thousands of decisions” and is equipped with programming tools such as a code editor and browser – “everything a person needs to do their job.”
With a valuation of $2 trillion, Cognition Labs will join other adolescent AI startups Mistral AI and Perplexity AI in billion dollars valuations Club. Cognition Labs did not immediately respond to a request for comment.
After chipmaker Nvidia, buoyed by AI hype, became the first semiconductor company to reach a $2 trillion valuation in February, Torsten Sløk, chief economist at Apollo Global Management, warned that the current AI bubble has surpassed the Internet bubble of the 1990s. “Today, the 10 largest companies in the S&P 500 are more overvalued than the 10 largest companies during the tech bubble in the mid-1990s,” Sløk – he wrote in The Daily Spark.
However, Citigroup strategists discovered that Nvidia’s stock price was rising there was nothing to worry about.
“The AI bubble is not problematic, and earnings results suggest it is a smaller bubble to begin with,” said a team of quantitative strategists at Citigroup.
