Snowflake Talks to Acquire Reka AI Fizzles With No Deal

May 22, 2024

31 1 minute read

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(Bloomberg) — Snowflake Inc.’s talks to acquire startup Reka AI for more than $1 billion have broken down, dashing an effort by the software company to bring more generative AI muscle in-house.

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Reka makes large language models — artificial intelligence software trained on massive swaths of the internet that can be used for a range of tasks, such as captioning images or as customer support chatbots. Snowflake, which makes cloud-based data analytics tools, was in discussions to acquire Reka for more than $1 billion, Bloomberg reported last week. Those talks have ended, according to people familiar with the matter who asked not to be identified discussing private information.

Snowflake is scheduled to report quarterly earnings Wednesday. Snowflake and Reka did not comment on the deal talks.

Snowflake sees generative AI as an accelerant to its business. It released its own large language model, Arctic, in April. The company also lets customers use third-party AI models, such as those from Reka, on their data within Snowflake.

Reka was founded in 2022 by researchers from Alphabet Inc.’s Google and Meta Platforms Inc. It was valued at about $300 million in a 2023 investment round, which included funding from Snowflake’s venture arm, according to a Reuters report.

As the field of generative AI has grown in popularity and hype, several big tech companies have rushed to partner with or acquire startups working with the technology.