Spanish AI startup Multiverse Computing has raised €189 million ($218 million) from investors including Bullhound Capital, HP, Forgepoint Capital, and Toshiba.

The company claims its compression tech can shrink large language models (LLMs) by up to 95% without hurting performance.

This innovation could cut AI model operating costs by as much as 80%, using methods from quantum physics and machine learning without needing a quantum computer.

Multiverse has compressed major LLMs like Meta’s Llama, DeepSeek, and Mistral, placing it among top European AI firms.

CEO Enrique Lizaso Olmos said the firm targets compressing open-source LLMs for enterprise use, with its tool available on AWS.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Model compression emerges as a critical frontier in AI development

Multiverse Computing’s technology represents a significant milestone in the rapidly growing model compression market, projected to expand from $1.01 billion in 2023 to $1.63 billion by 2030 with a 7.1% CAGR 1.

This breakthrough addresses a fundamental challenge in AI deployment: the growing tension between model size and practical usability, with compression techniques becoming essential for running sophisticated AI on everyday devices.

The 80% cost reduction claimed by Multiverse aligns with industry benchmarks for effective compression techniques, which typically achieve similar efficiency improvements through methods like pruning, quantization, and knowledge distillation 2.

This shift toward smaller, more efficient models (often called SLMs or Small Language Models) represents a growing industry trend focused on balancing performance with operational costs and privacy considerations 3.

The environmental impact is also significant, as training large models can be energy-intensive. For example, BERT’s training alone generates as much carbon as a round-trip flight from New York to San Francisco 4.

2️⃣ Europe’s AI startup ecosystem shows regional specialization and growth

Multiverse Computing’s rise to become Spain’s largest AI startup highlights the country’s emerging role in Europe’s AI landscape, where traditionally France (€1.3B), Germany (€910M), and the UK have dominated funding 5.

European AI startups saw a 55% year-on-year investment increase in Q1 2025, bucking the trend of slowing overall tech investment and indicating strong confidence in the sector’s growth potential 6.