MIT startup takes a different approach
Amid rising competition in artificial intelligence spurred by ChatGPT, a startup formed by MIT researchers with a fundamentally new approach came out of stealth mode and announced its initial funding on Wednesday. Liquid AI, which was founded in March, said it raised $37.5 million in seed funding from high-profile investors led by Boston Celtics co-owner Stephen Pagliuca and San Francisco venture capital firm OSS Capital. Other investors include Thermo Fisher chief executive Marc Casper, RedHat cofounder Bob Young, and Shopify cofounder Tobias Lütke. Unlike popular apps ChatGPT, Bard, and Dall-E, which rely on complex generative AI software models with billions of parameters, Liquid AI’s neural-network models are much simpler and require significantly less computer power to train and operate, chief executive Ramin Hasani said in an interview. For example, industry leader OpenAI needed billions of dollars to pay for the computing power to develop the model underlying ChatGPT. “You need a fraction of the cost of developing generative AI, and the carbon footprint is much lower,” Hasani said of Liquid AI. “You get the same capabilities with a much smaller representation.” The models underlying OpenAI’s ChatGPT are built by training software on billions of words or millions of images found on the internet to create a set of fixed connections among billions of “virtual neurons.” Then, ChatGPT “writes” humanlike sentences by calculating the probabilities of words appearing after groups of words it analyzed in its training data, for example. Liquid AI’s more dynamic AI software maintains adaptability and flexibility even after training, allowing it to use just a few dozen virtual neurons to control a robot or pilot a drone, the company said. The MIT researchers even had to crack a calculus challenge unsolved since 1907 to allow Liquid AI to address larger challenges. The software can be used to steer a car along a road and autonomously pilot a drone to find an unknown target, Hasani demonstrated in a talk at the TEDxMIT conference in Cambridge a year ago. The AI software can also be used as a “universal tool” to create text, audio, and images, Hasani said. It remains to be seen how the new approach will stack up against the prevailing models from OpenAI and rivals such as Anthropic. The company will start by going after corporate clients that want to build private AI apps for financial modeling, medical research, or other uses. For now, Liquid AI has no plans for producing apps for consumers like ChatGPT, Hasani said. Pagliuca, who specialized in tech and life sciences investments during his three-plus decades with Boston private equity giant Bain Capital, is investing in Liquid AI through his family investment office, PagsGroup. He helped bring other investors on board, including Casper, a former Bain colleague, and Texas venture capitalist Jim Breyer. (Pagliuca recently hosted the Liquid AI team courtside at TD Garden on Nov. 10. The C’s ended up beating the Brooklyn Nets.) — AARON PRESSMAN and JON CHESTO