Concerns about the impact of AI chatbots on mental healthstaff security, harassmentand disinformation have forced AI developers to implement safeguards to better control how and what their AI models can respond or do.
But worries and concerns cannot erode demand. AI offers a lot of promise, and people don’t want a faceless tech company restricting their access to that potential. And if they can preserve their privacy while using AI models however they want, why not?
Venice AIwhich offers access to more than 200 AI models while allowing users to retain their privacy, is gaining traction thanks to that demand. In just two years, the company already has more than 850,000 unique visitors to its website and serves more than 3 million active users and an average of 1.7 million API calls per day.
The startup hosts “uncensored” open source models in its own data centers and directs queries to closed source models, such as those from OpenAI or Anthropic. All user input is encrypted and unencrypted on the client side, and is routed through an external proxy before being processed and returned, with no data stored on Venice’s own systems. It also provides end-to-end encryption on some models, although you have to pay a subscription to get that feature.
The company is already profitable, with annualized revenue of more than $70 million, CEO Erik Voorhees (pictured above, center) told TechCrunch during an exclusive interview.
Understandably, investors have flocked to get a piece of that traction. Venice AI said on Wednesday it had raised a $65 million Series A at a $1 billion valuation, its first external fundraising. The round was led by cryptocurrency-focused venture firm Dragonfly, with participation from Coinbase Ventures, North Island Ventures and others.
It’s hard to miss the overlap between Voorhees, Venice’s focus on privacy, and its new cryptocurrency investors, especially given the CEO’s background and previous work. Voorhees, an early bitcoin proponent, founded a few crypto companies, including a bitcoin betting site. satoshi says and cryptocurrency exchange shape changeand has long advocated for preserving user privacy.
In fact, when a Wall Street Journal investigation accused ShapeShiftwhich initially did not require its users to identify themselves, to process millions of suspicious funds, Voorhees reportedly said, “I don’t think people should register their identity to catch a casual criminal.”
He struck a similar note when asked how Venice AI thinks about offering access to AI models in light of Recent cases of AI psychosis. and the resulting damage, saying that his team treats its service as a “neutral tool or a neutral platform.”
“This is the same principle that you have in Bitcoin, where Bitcoin, as a neutral protocol, works the same way for all people,” he said. “I think it’s actually quite dangerous from a security perspective, for the world to enter this next phase and for everyone to be constantly surveilled. To me, that’s actually much more dangerous than any particular person asking a controversial question or something that could be considered bad.”
There is also considerable focus on giving agency to users. Users can freely choose between AI models that can generate text, images, audio and video, all of which vary in their performance, quality and amount of censorship applied. The website prominently features several AI “characters” that you can customize and chat with, and the company proudly claims to offer an “uncensored” experience.
“We’re optimizing freedom and respecting users as adults, which I think is rare these days,” Voorhees said.
The founder said Venice is also working on system prompts for some open models to tell them to respond more openly, although it doesn’t add any restrictions to the models.
As expected, there are two crypto tokens associated with the effort. Venice launched a token called “VVV” in early January in an attempt to attract users, Voorhees said, and in August of last year added another, called “DIEM.” Users can purchase VVV and then stake it to mint DIEM, generating $1 in AI credits per day that you can spend in Venice. However, Voorhees said that only about 8% of the company’s users pay with cryptocurrency.
The founder attributed the company’s growth to the strong performance of crypto tokens, although he said the strongest driver was approaching feature parity with ChatGPT. “When we launched it, we were very far from what ChatGPT could do, but people used us because it was private. And today, we are very close to what ChatGPT can do (…) so as we close that gap, it has become an increasingly compelling alternative,” he said.
Looking ahead, Venice AI wants to use the fresh money to start purchasing GPUs and build its own data centers so it can stop leasing GPUs and increase its gross margins.
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