Concerns about the impact of AI chatbots on mental health, personal safety, harassment, and misinformation have forced AI developers to implement safeguards to better control how and what AI models can respond or do.
But concerns and concerns cannot erode demand. AI offers a lot of promise, and people don’t want faceless technology companies limiting access to that potential. And what if you could use AI models however you want while protecting your privacy?
Venice AI, which provides access to over 200 AI models while protecting user privacy, is gaining popularity thanks to this demand. In just two years, the company has already had over 850,000 unique visitors to its website, serving over 3 million active users and an average of 1.7 million API calls per day.
The startup hosts “uncensored” open source models in its own data centers and routes queries to closed source models like OpenAI or Anthropic. All user input is routed through an external proxy before being processed and returned encrypted and unencrypted on the client side, and no data is stored on Venice’s own systems. Some models also offer end-to-end encryption, but you’ll have to pay a subscription fee to use that feature.
The company is already profitable, with annual revenue exceeding $70 million, CEO Erik Voorhees (center photo above) told TechCrunch in an exclusive interview.
Naturally, investors flocked to gain this traction. Venice AI said Wednesday it has raised a $65 million Series A at a $1 billion valuation, the company’s first external funding. This round was led by Dragonfly, a cryptocurrency-focused venture company, with participation from Coinbase Ventures, North Island Ventures, etc.
The overlap between privacy-focused Voorhees of Venice and the new cryptocurrency investor is hard to miss, especially considering the CEO’s background and past work. An early Bitcoin advocate, Voorhees has founded several cryptocurrency companies, including Bitcoin gambling site Satoshi Dice and cryptocurrency exchange ShapeShift, and has long been an advocate for user privacy.
In fact, when a Wall Street Journal investigation accused ShapeShift, which initially did not ask users to verify their identities, of handling millions of suspect funds, Voorhees said, “I don’t think people should record their identities to catch criminals sometimes.”
When asked what Venice AI thinks about providing access to AI models in light of recent cases of AI psychosis and the resulting harm, he said his team treats their service as a “neutral tool or a neutral platform.”
“This is the same principle of Bitcoin, which is that Bitcoin, being a neutral protocol, works the same way for everyone,” he said. “I think it’s actually very risky from a safety standpoint for the world to go into the next phase and for everyone to be under constant surveillance. To me, that’s actually a lot more risky than asking controversial questions or specific people that could be considered bad.”
There is also a significant focus on providing agency to users. Users are free to choose between AI models that can generate text, images, audio and video, all with different performance, quality and degree of censorship applied. The website prominently features several AI “characters” that you can customize and chat with, and the company proudly says it offers an “uncensored” experience.
“We optimize freedom and actually respect users as adults, which I think is rare these days,” Voorhees said.
The founder said that Venice is also working on some open model system prompts that won’t add any restrictions to the models, but will direct them to answer more openly.
Naturally, there are two crypto tokens involved in this effort. Voorhees said Venice launched a token called “VVV” in early January to attract users and added another token called “DIEM” in August last year. Users can purchase VVV and then mint DIEM to generate $1 per day worth of AI credits that can be used in Venice. However, Voorhees said only about 8% of the company’s users pay with cryptocurrency.
The founder attributed the company’s growth to the good performance of its cryptocurrency token, but said the strongest driver was approaching functional parity with ChatGPT. “When we launched, we were very far from what ChatGPT could do, but because we were private, people would use us. And because we were very close to what ChatGPT could do today (…), we closed that gap, so ChatGPT became an increasingly attractive alternative,” he said.
Going forward, Venice AI wants to use the new cash to start purchasing GPUs and building its own data centers so it can stop leasing GPUs and increase gross margins.
If you purchase through links in our articles, we may receive a small commission. This does not affect our editorial independence.
