OpenAI Chairman & Ex- Google/Facebook Executive's AI Startup Sierra Gets $4.5 Bn Valuation

Sierra, an Al startup co-founded by Bret Taylor, former Google executive and former CTO of Facebook (Now Meta), has recently raised $175 million in a funding round led by Greenoaks Capital. This round has given Sierra a valuation of $4.5 billion, a significant jump from its previous valuation of nearly $1 billion earlier this year.

Taylor is most notable for leading the team that co-created Google Maps and his tenures as the CTO of Facebook (now Meta Platforms), as the chairman of Twitter, Inc.'s board of directors prior to its acquisition by Elon Musk, and as the co-CEO of Salesforce (alongside co-founder Marc Benioff). Taylor was additionally one of the founders of FriendFeed and the creator of Quip.

Since 2023, Bret Taylor is chairman of OpenAI and a board member of Shopify. In the same year, he co-founded Sierra AI with Clay Bavor, Taylor's long time friend who spent 18 years at Google, where he held various leadership roles, including leading Google Labs, Google's AR/VR efforts (Project Starline and Google Lens). 

Sierra focuses on providing Al-powered customer service chatbots to enterprises, helping companies like WeightWatchers and Sirius XM enhance their customer interactions.

The AI startup aims to differentiate itself by reducing "hallucinations," where Al models generate false information, ensuring that brands can trust their Al agents.

This funding round comes less than a year after Sierra's public launch, and it highlights the growing investor interest in AI applications that generate steady revenue.

Before the latest funding round, Sierra had raised $110 million in a round led by Sequoia Capital and Benchmark at a valuation of nearly $1 billion. This round also saw participation from Thrive Capital and ICONIQ.

Sierra's rapid growth and increasing valuation highlight the strong investor confidence in its Al solutions for enterprises.

Headquartered in San Francisco, California, Sierra AI emphasizes creating more empathetic and conversational AI interactions, contrasting it with frustrating automated systems like airline bots. The startup allows clients to customize the AI agent's personality to match their corporate brand.

Sierra aims to provide personalized AI solutions to help these companies improve customer interactions.

Beside these, Sierra has been focusing on enhancing its AI models to reduce "hallucinations," where AI generates false information. This ensures that brands can trust their AI agents to interact with customers accurately and reliably.

To recall, in mid of this year, an another California-based AI startup Alembic introduced a new AI system that tackles the issue of "Hallucinations" in artificial intelligence. Alembic announced that it has developed a new Al system that it claims completely eliminates the generation of false information that plagues other Al technologies, a problem known as "hallucinations".

Several startups are actively working on addressing the AI hallucination problem. Squirro uses Retrieval Augmented Generation (RAG) technology to ensure that every piece of information generated by their AI is traceable to a source, promising zero hallucinations.

Similar to Squirro, SiftHub employs RAG technology and fine-tuned large language models with industry-specific knowledge to generate personalized responses with zero hallucinations.

Among these AI Startups, Sierra as one of the most highly valued AI startups. The AI startup has crossed $20 million in annualized revenue, according to Reuters.
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