Snowflake mulls $1b buy of Singaporean co-founded AI startup: sources

Snowflake chairman and CEO Frank Slootman / Photo credit: Snowflake

Snowflake, a platform for AI and data analytics workloads, is mulling a US$1 billion deal to acquire generative AI developer Reka AI, Bloomberg reported, citing sources briefed on the situation.

Reka AI develops large language models that can be used in areas like online customer support and caption generation.

The company was founded by ex-employees of Google and Meta. Yi Tay, a Singaporean, acts as the company’s chief scientist, while CEO Dani Yogatama grew up in Indonesia.

In June 2023, Reka raised US$58 million in a funding round, which Snowflake participated in. The firm is reportedly valued at US$300 million.

Purchasing Reka AI could boost Snowflake’s current business, allowing customers to use third-party AI models. It can also supplement Snowflake’s previous efforts into the AI space – its own language model, Arctic, launched in April.

Similarly, Reka launched its first multimodal language model called Reka Core in April. The company said it is competitive with the leading models of OpenAI, Anthropic, and Google at the time.

This proposed acquisition coincides with a slump in Snowflake’s revenue growth due to companies cutting down on their software purchases. This year so far, Snowflake’s shares dropped 17%.

See also: 50 rising AI startups in Asia