NEW YORK, May 15 (Reuters) - AI startup Cohere has

doubled its annualized revenue since the beginning of the year,

driven by growing demand for secure, customized AI tools among

enterprise clients in regulated sectors, the company told

Reuters.

The company has crossed an annualized revenue of $100

million as of May 2025, according to one person familiar with

the matter.

A Cohere spokesperson declined to comment on the financials.

The growth followed a strategic shift in the third quarter

of 2024 with a focus on private deployments tailored for

customers in sectors such as finance, healthcare and government.

Chief Executive Aidan Gomez outlined the new direction in a

year-end memo, emphasizing a move toward building tailored

models for enterprise users over larger foundation models.

Most of its revenue stems from long-term contracts, the

company said.

Roughly 85% of Cohere's business now comes from such private

deployments, the company said, with margins reaching 80%.

As part of the strategy, Cohere in January launched a

ChatGPT-style application called North, aimed at helping

knowledge workers with tasks such as summarizing documents. The

product is currently being tested with a limited group of

customers, including Royal Bank of Canada and LG.

Founded in 2019, Cohere has raised more than $900 million

from investors including Nvidia, Cisco and Inovia Capital. Its

customers also include Fujitsu, Oracle and Notion. The company

was last valued at $5.5 billion.

Cohere's shift toward smaller, specialized models reflects a

broader trend in the AI sector, as companies prioritize

domain-specific tools over large, generalized systems. The move

comes as AI labs report diminishing returns from scaling up

model size - a strategy that once drove major breakthroughs.