The CEO, Hoan Ton-That, said “it is time for the next chapter in my life” and that he would remain on as a board member of Clearview AI. He declined to comment when asked for more details on what specifically sparked his resignation. The news was first reported by Forbes.

Clearview AI now has two “co-CEOs,” early investor Hal Lambert and co-founder Richard Schwartz, who want to capitalize on new “opportunities” under the Trump administration, according to a statement Clearview AI sent to TechCrunch.

Both men have a long history in Republican politics. Lambert’s investment firm, Point Bridge Capital, is best-known for launching the MAGA ETF in 2017, which invests in corporations supportive of Republican candidates. Meanwhile, Schwartz served as a senior advisor to Rudy Giuliani during his tenure as mayor of New York City. 

Clearview AI sells access to its facial recognition database to law enforcement and federal agencies who use it to identify suspects or find missing people. Because the startup obtained the photos without people’s consent, it has had to fend off multiple privacy suits and fines. 

As of September 2024, Clearview AI has racked up over $100 million in GDPR fines from European data protection agencies in the Netherlands, France, and elsewhere. Clearview AI has historically remained uncooperative, refusing to pay these fines. (Clearview didn’t respond to a request for comment from TechCrunch asking if it has paid any yet.)

Clearview AI has also faced a lawsuit from conservative investor and self-described investigative journalist Charles Johnson over claims that he was a co-founder and owed a share of commissions. Johnson recently dropped the suit, per a legal filing. But Clearview AI’s counterclaims in the suit, which allege defamation and breach of contract against Johnson, are ongoing, Biometric Update reported.

Ton-That declined to elaborate on his plans when asked by TechCrunch. According to his statement, Clearview AI is in its “strongest position ever” financially, achieving its highest growth and revenue in 2024. However, the startup has struggled to win large federal contracts and remains unprofitable, Forbes reported.

Clearview AI, whose investors include Peter Thiel and Naval Ravikant, raised $30 million in a Series B round in 2021 that valued the company at $130 million, according to a post on its website. 

Today, former OpenAI CTO Mira Murati announced her new venture: Thinking Machine Labs, a public benefit corporation that aims to build accessible and broadly capable artificial intelligence systems. After leaving AI juggernaut OpenAI last September, Murati has brought together a team of engineers and researchers who have worked at buzzy startups like Character AI, Mistral and unsurprisingly, OpenAI. Additionally, Thinking Machine Labs said it will publish its technical blog posts, code and papers and collaborate with the broader community, indicating it plans to open source its work.

Now let’s get into the headlines.

BIG PLAYS
The cluttered world of AI reasoning models just got its newest addition. On Monday Elon Musk’s AI company, xAI launched a new AI model called Grok-3 that can process and answer complex questions across domains like science and math. In a livestream on X, Musk said the company’s mission is to “understand the universe…to figure out what’s going on, where are the aliens and what’s the meaning of life.”

The billionaire claims the model is built using 10 times more compute than Grok 2, likely from its “gigafactory of compute” in Memphis, and that it has been trained on public data from sources including social media platform X and legal documents. xAI also rolled out an AI-powered search engine called DeepSearch. OpenAI cofounder and former Tesla executive Andrej Karpathy, who tested the model, says Grok-3’s capabilities are largely on par with OpenAI’s best models but gets some questions wrong. Others have noted the model is lacking in its coding abilities compared to others. Grok-3 has yet not been independently evaluated and is only available to paying users.

ETHICS + LAW
Condé Nast, Vox, The Atlantic and a group of publishers have sued $5.5 billion-valued AI company Cohere for copyright and trademark violations. (Forbes is part of the group suing Cohere.) The lawsuit alleges that the Canadian AI startup scraped 4,000 copyrighted articles from the internet and used them to train its family of large language models called Command, which reproduced sections or entire works (at times word for word), allowing users to get information without visiting the publishers’ websites. It’s not the first time an AI company has faced publishers’ scrutiny. Last year, AI search engine Perplexity came under fire for republishing copyright works from multiple publications including Forbes. (In response, Forbes sent a cease and desist letter to Perplexity, accusing it of copyright infringement.)
AI DEALS OF THE WEEK
Humanoid robotics company Figure AI is in talks to raise $1.5 billion in venture capital at an eye-popping $39.5 billion valuation, Bloomberg reported. The news comes as the company is reportedly in talks with Meta to make robots for household chores.
AI legal company Luminance, which helps customers like AMD and National Grid generate, negotiate and analyze contracts, has raised $75 million in series C funding.
Chip startup Encharge AI has raised $100 million in a series B funding led by Tiger Global. CEO Naveen Verma started the company out of a lab in Princeton, where he worked on designing architecture for hardware that would help run large language models more compute and energy efficiently. Verma says the chips allow AI models to run locally on devices such as personal computers.
DEEP DIVE
Elon Musk’s surprise bid for the nonprofit controlling artificial intelligence behemoth OpenAI did exactly what he wanted it to. Announced as OpenAI CEO Sam Altman and other business and world leaders convened in Paris for a global AI summit, the unsolicited $97.4 billion offer for the nonprofit refocused the world’s attention on Musk and his efforts to block OpenAI’s transition to a for-profit company.
An irked Altman quickly dismissed Musk’s offer and sources close to OpenAI say it’s hard to imagine it going anywhere. But even if that’s the case, Musk has likely caused a headache for Altman, who is orchestrating the company’s transition to a for-profit venture. He’s attempted to forcefully raise the nonprofit price – which would make it harder for OpenAI to justify paying anything less.
Musk’s bid is the first hard number that values the nonprofit that controls OpenAI; that entity has to be bought out and become a minority shareholder for OpenAI to successfully transition to a for-profit company. Previously, The Information had reported the nonprofit was worth around $40 billion, citing a 25% stake and the company’s valuation at time. But with his $97.4 billion bid, Musk has backed Altman into a corner; now, as a board member, Altman faces pressure to sell the nonprofit for at least what Musk is asking. If he were to sell for anything less, it’d be a bad look, making it seem like he’s lowballing his own company to reduce share dilution.
“The important part here is that if [the board] doesn’t take it, which they almost certainly won’t, then they’ve made clear that they think the assets Musk is trying to buy are worth more than $97 billion,” a person familiar with the company told Forbes. “So if the for-profit tries to buy them later, the nonprofit will have to get more than that — otherwise the board is likely in breach of their fiduciary duties.”
Read the full story on Forbes.
MODEL BEHAVIOR
Generative AI is making it easier for fraudsters to carry out romance scams at scale, Wired reported. AI chatbots are being used to generate hundreds of deceptive scripts and generate fully fake profiles on dating apps. AI has already made a foray into the dating world. Last year, we wrote about a man who programmed ChatGPT to reply to his matches on Tinder and set up dates for him.

Rumors of the fundraise were first reported by TechCrunch. The final numbers confirm some but not all of the details we previously reported (specifically, the overall size of the round is smaller than we had heard; the valuation and lead investors are the same).

The funding will be used to continue building out ElevenLabs’ audio tools and for business development.

Mati Staniszewski, the CEO who co-founded the company with childhood friend Piotr Dabkowski, said in an interview that the startup is focusing its research on building audio AI models that are more expressive and have more control. Staniszewski added that the company is also focusing on “omni-models”: combining text-based models with its audio models for multimodal interactions.

There has been a frenzy of investor interest in ElevenLabs going back several months, on the back of two important currents. First, there has been a huge wave of hype around generative AI that has been catching a lot of companies in its wake. Second, ElevenLabs has emerged as a major player among those providing synthetic voice technology. Dozens of major publishers and content creators across verticals like media and gaming, as well as a number of other tech startups, are all using ElevenLabs’ technology to power their voice and audio features.

Unsurprisingly, that has translated into a very crowded funding round with a lot of prominent names.

New investors in this Series C include NEA, World Innovation Lab (WiL), Valor, Endeavor Catalyst Fund, and Abu Dhabi investment firm Lunate. Past investors also participating include Sequoia Capital, Salesforce Ventures, Smash Capital, SV Angel, NFDG, and BroadLight Capital.

Alongside these, ElevenLabs is also picking up a number of new strategic backers — that is, companies using its technology who are now investing in it, too. These include Deutsche Telekom, LG Technology Ventures, HubSpot Ventures, NTT DOCOMO Ventures, and RingCentral Ventures.

ICONIQ partner Seth Pierrepont will join the company’s board, alongside existing board members Jennifer Li from a16z and the co-founders of the company.

ICONIQ has been ramping up its activities around generative AI startups. Tapping into written output, the firm also co-led a $200 million round in Writer last November.

“We have always felt that audio is a very important modality, and we thought there will be a very big company built in this category,” Pierrepont told TechCrunch. “We have observed ElevenLabs from its launch, and we were impressed by the quality of the technology, how quickly it ascended in terms of mindshare and momentum, and the depth of domain expertise of the founders.”

Pierrepont added that as a board member, a lot of the conversations with the company will be around creating new use cases for audio and finding the right markets for it.

At a time when startups are still finding it challenging to close growth rounds, it’s notable that ElevenLabs raised its Series B round of $80 million, which valued it at $1 billion, just a year ago. ElevenLabs has raised a total of $281 million to date.

The product roadmap

In addition to a focus on improving its AI models, the company plans to use the funding to grow its conversational AI builder with an ambition to reach more consumers directly and through partnerships.

Co-founders Piotr Dabkowski and Mati Staniszewski. Image Creidts: ElevenLabs

Last year, the company debuted an AI conversational agent platform, and a key part of that product was developing a speech-to-text component. Staniszewski noted that the company wants to improve in that area a lot more.

“We want to understand what’s being said by you in a conversation better. We are working on ways to move away from only generating content and understanding and transcribing speech,” Staniszewski said. “Many people say that speech-to-text is a solved problem. But for many languages, it is pretty bad. We think we can build better speech detection models because we have in-house teams to annotate data and give us quick feedback.”

The company also wants to double down on creating AI-powered conversational agents by supporting legacy communications like telephony and better integrating different kinds of knowledge sources. This is partly why it is partnering with telcos in this round.

It’s also being used by its customers to tap into their own archives. Last year, ElevenLabs partnered with TIME publication to deploy a conversational bot for users to ask questions about TIME Person of the Year.

Staniszewski said the company envisions more conversational AI agents on sites: on news sites, for example, users would be able to ask questions about stories or ask the bot to summarize them.

The CEO also noted that while AI-powered voice bots’ quality has improved, the problem of sounding natural while reacting to humans speaking or emoting in different ways has not been solved yet.

“The way I speak to you impacts how you react or respond to me. Sometimes, I’ll be excited, or sometimes, I’ll be calm, and at times, I will interrupt you. You will respond to me accordingly. Current-gen AI solutions are on the verge of being good, but they are not as good as humans,” Staniszewski said.

ICONIQ’s Pierrepont also emphasized that if AI doesn’t understand you well when you are talking, machine communication breaks down and users immediately lose interest.

ElevenLabs has mostly grown its reach (and revenue funnel) by way of B2B partnerships. But it’s also going out on a direct limb, too.

In 2024, the startup launched its first purely consumer-facing product, ElevenLabs Reader, an app that reads out articles, text, and documents. Later, the company added the ability to create a podcast with generative AI voices from documents and web pages — not unlike what you can do with Google’s NotebookLM. Staniszewski said that it wants to expand into more consumer experiences.

It may actually already be doing that. TechCrunch spotted that the company has been testing a program on the ElevenLabs Reader app inviting users to publish audiobooks on the platform. The company also wants to give tools to creators to have multiple voices read out an audiobook in the future while also creating better localization.

Staniszewski noted that the company is figuring out ways for users and companies to better distribute their content, including on its own app. Whether that brings it into actual direct competition with its customers will be something to watch. (That has been one reason why many B2B tech companies prefer to stay away from direct-to-consumer plays.) Notably, ElevenLabs powers voice technology for audio content platforms like Lightspeed-backed Pocket FM and Google-backed Kuku FM.

ElevenLabs already powers AI-generated audio on products and platforms like Perplexity, Rabbit R1, Chess.com, ESPN, Lex Fridman podcast, The Atlantic, and Synthesia. The goal for the company is to be in more places and also own an end-to-end conversation stack so it can generate more experiences and insights for its customers.

Safety

Not all of ElevenLabs’ silver linings have been without clouds: its tech has been implicated in a few notable misinformation campaigns. A recent report from threat intelligence company Recorded Future found that the company’s product was used in a Russian propaganda operation. Last year, someone used the company’s voice platform to create an audio deepfake of Joe Biden. In 2023, Motherboard reported that 4chan members allegedly used the AI audio generation tool to create voices that sounded like Joe Rogan, Ben Shapiro, and Emma Watson to spread problematic content.

But the company has been quick to respond. Today, it has a policy prohibiting “unauthorized, harmful, or deceptive impersonation.” Plus, it uses a mix of machine-led and human moderation to weed out such content. However, as the company grows its set of tools and has more direct consumer touchpoints, this opens the door to more opportunities for malicious actors to look for ways to misuse it.

“As one of the frontrunners of AI audio work, we do treat it as our responsibility to build the right safety mechanism as we build out the technology. We will frequently make choices to prioritize safety over speed of deployment or commercial benefit,” Staniszewski said.

Staniszewski added that while the company follows C2PA, a standard to track content using metadata, it also has a public tool that allows anyone to check if audio was generated through ElevenLabs technology using digital signatures it places in the audio during generation. That could also be a track that continues to develop over time as approaches for misuse also become more sophisticated.