Intel spinout Articul8 raises more than half of its $70M round at a $500M valuation

Article 8an enterprise AI company it came out of Intel in early 2024has raised more than half of the $70 million it planned to spend on $500 million, according to its CEO, as it looks to capitalize on the growing demand for AI systems in regulated industries.

The Series B funding round is being made in two phases, the first led by Spain’s Adara Ventures, Articul8 founder and CEO Arun K. Subramaniyan (pictured above, center) said in an interview. He declined to specify the size of the first quarter, but said the company expects to close around the first quarter of this year.

Articul8’s calculation of its current funding shows a five-fold increase from the value of $ 100 million after the company’s Series A investment in January 2024. Since then, the Santa Clara company said it has exceeded $ 90 million in the value of the contract – the value of the contract for all the customers who have signed it – from 29 Hitachi, Intel Energy and Franklin customers.

Subramaniyan told TechCrunch that Articul8 was under no pressure to raise money, explaining that the company had plenty of cash following major industry deals.

“We don’t have money,” he said.

The company expects to finish the year with a return of just over $57 million, Subramaniyan said, about 45% to 50% of what was previously reported.

Articul8 creates unique AI systems that work within the customer’s IT infrastructure, rather than relying on shared, standardized models. Instead of selling stand-alone models, the company positions its technology as software and AI assistants tailored to specific business applications, targeting regulated industries such as energy, manufacturing, aerospace, financial services, and semiconductors, where accuracy, computation, and data management are critical.

“Our competition is everyone,” Subramaniyan said. “But today, the main competitors are the providers of cloud services, because they have realized that their brand, as a general purpose (offer), is all about things.”

He added that Articul8’s focus on specialized systems appeals to customers who need predictable results and analytical solutions, which are difficult to achieve with traditional brands that are managed on shared cloud platforms.

Articul8 plans to use the Series B proceeds mainly to expand research and product development and expand its operations globally, with an eye on Europe and other Asian regions.

Adara Ventures’ participation will help accelerate the European expansion plan, as the European Investment Fund supports the Madrid-based VC firm’s strong fund, Subramaniyan said. The company is also looking to expand into markets including Japan and South Korea, where it has begun working with large customers, he said.

India’s Aditya Birla Ventures also participated in the ongoing venture, Subramaniyan said.

Articul8 works with major technology groups including Nvidia and Google Cloud, Subramaniyan said, adding that Amazon Web Services is the company’s customer and partner for content deployment.

The company employs 75 people, with about 80% focused on R&D, with teams spread across the US, Brazil, and India.