AI startup Writer launches new model to compete with OpenAI [Video]

San Francisco-based AI startup Writer debuted a large artificial intelligence model Wednesday to compete with enterprise offerings from OpenAI, Anthropic and others. But, unlike some of those competitors, it doesn’t need to spend as much to train its AI.

The company told CNBC it spent about $700,000 to train its latest model, including the data and GPUs, compared with the millions of dollars competing startups spend to build their own models. Its strategy has caught the attention of investors.

Writer is raising up to $200 million at a $1.9 billion valuation, according to a person familiar with the situation who spoke with CNBC. That’s nearly quadruple the company’s valuation in September 2023, when it raised $100 million at a valuation of more than $500 million.

The company cuts costs using synthetic data, or data created by AI. It’s designed to mimic the real-world information that’s usually fed into models without compromising privacy and is becoming a more popular method for …