AI21 Labs, an Israeli startup building its own large language models, is raising a $300 million Series D funding round, a person with knowledge of the deal said.

The valuation could not be learned. The company last raised $208 million at a $1.4 billion valuation in 2023. This round would bring the company’s total funding to $636 million.

AI21 was founded in 2017 by the entrepreneurs and AI researchers Amnon Shashua (the founder and CEO of Mobileye), Yoav Shoham (a professor emeritus at Stanford University and a former principal scientist at Google), and Ori Goshen (a serial entrepreneur and the founder of CrowdX).

While many AI startups rely on LLMs built by companies like Anthropic or OpenAI, AI21 is building its LLMs from the ground up.

Its goal is to make generative AI more dependable for companies by reducing hallucinations, which are when LLMs present false information as fact.

In March, AI21 launched an AI orchestration system called Maestro, which it says can reduce hallucinations by 50% and boost reasoning model accuracy to over 95%.

Existing investors in AI21 include Google, Nvidia, Intel Capital, Walden Catalyst, Pitango, SCB 10X, B2venture, Samsung Next, Comcast Ventures, and Ahren Innovation Capital. Customers include Fnac, Capgemini, and the website builder Wix.

About $7 billion in investment went to AI-related startups last month, representing 30% of venture funding worldwide, according to Crunchbase data.

Israeli tech companies have raised more than $12 billion in 2024, up 31% from 2023, Startup Nation Central says. The Israeli cybersecurity company Wiz was just acquired by Google for $32 billion, the search giant’s largest-ever acquisition.