David Ferrucci, a prominent artificial intelligence researcher who led the team that created IBM Watson, has raised nearly $60 million for his AI startup called Elemental Cognition, according to a regulatory filing.
The filing on Thursday says the company sold $59.95 million worth of equity to 17 investors and plans to raise another $5.75 million.
Headquartered in New York’s historic Helmsley Building, Elemental says on its website that the company seeks to develop AI that “thinks before it talks.” It offers two enterprise products, Cogent and Cora, which are essentially chatbots designed for different scenarios. They can be used in financial services, interactive travel planning and for automating research discovery in life sciences.
Ferrucci led IBM Watson from 2006 until the end of 2012, during which time the computer system famously won “Jeopardy!” He then ran AI research for Bridgewater Associates, one of the world’s largest hedge funds. Ferrucci has a Phd in computer science from Rensselaer Polytechnic Institute.
Elemental’s operating chief is David Shepler, another former top Bridgewater executive who also worked at IBM. Other members of Elemental’s leadership team with IBM on their resumes include Eric Brown and Mike Barborak, who are both vice presidents.
Jim Breyer, founder and CEO of Breyer Capital and one of the first investors in Facebook, is named on Elemental’s investors and advisors page, as is former IBM CEO Sam Palmisano. Greg Jensen, Bridgewater’s co-chief investment officer, and Geoff Yang of Redpoint Ventures are also in that group.
Elemental didn’t respond to requests for comment.
Investors have been swarming to AI startups this year following the release in late 2022 of OpenAI’s ChatGPT, which gave the public a clear look at the power of AI chatbots. While Elemental’s website doesn’t emphasize generative AI, the broad category that’s been red hot, its LinkedIn page says the company “provides a revolutionary Generative AI platform with superior natural language understanding that powers expert problem-solving intelligence and research & discovery applications.”
Elemental touts its hybrid AI platform as its standout offering. Instead of solely relying on large language models (LLMs) as is the case with ChatGPT, Elemental says it combines LLMs with an AI-powered reasoning engine to help responses better stay within guardrails.
Watson, which marked IBM’s early splash in artificial intelligence, never amounted to a profitable endeavor. In January of last year, the company sold its Watson Health unit for an undisclosed amount to private equity firm Francisco Partners. Three months ago, IBM announced WatsonX, which it’s billing it as a development studio for companies to “train, tune and deploy” machine-learning models.
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