Concerns about the impact of AI chatbots on mental health, personal safety, harassment, and disinformation are forcing AI developers to introduce safeguards to better control how AI models can respond or perform actions.
But concerns and concerns will not hurt demand. AI has a lot of potential, and people don't want faceless technology companies to limit their access to that potential. And if you can protect your privacy while using AI models however you like, why wouldn't you?
Venice AI provides access to over 200 AI models while maintaining user privacy, and is gaining popularity thanks to its demand. In just two years, the company's website already has over 850,000 unique visitors, serving over 3 million active users and an average of 1.7 million API calls per day.
The startup hosts an “uncensored” open-source model in its own data center and routes queries to closed-source models such as OpenAI and Anthropic. All user input may or may not be encrypted on the client side, is routed through an external proxy before being processed and returned, and no data is stored on Venice's own systems. Some models also offer end-to-end encryption, but you'll need to pay a subscription fee to take advantage of that feature.
The company is already profitable, with annual run-rate revenue of more than $70 million, CEO Erik Voorhees (pictured above, center) told TechCrunch in an exclusive interview.
Naturally, investors have flocked to get some of that traction. Venice AI announced Wednesday that it has raised $65 million in Series A at a valuation of $1 billion, its first external funding. The round was led by cryptocurrency-focused venture firm Dragonfly, with participation from Coinbase Ventures, North Island Ventures, and others.
It’s hard to miss the overlap between privacy-focused Voorhees and new crypto investors in Venice, especially considering the CEO’s background and past performance. An early supporter of Bitcoin, Voorhees has founded several crypto companies, including Bitcoin gambling site Satoshi Dice and cryptocurrency exchange Shapeshift, and has long advocated for user privacy.
In fact, when a Wall Street Journal investigation accused Shapeshift, which initially did not require users to reveal their identities, of processing millions of suspicious funds, Voorhees reportedly said, “I don't think people should have their identities recorded to catch criminals from time to time.”
When asked how Venice AI thinks about providing access to AI models in light of recent cases of AI psychosis and associated harm, he made a similar point, saying his team treats its service as a “neutral tool or neutral platform.”
“This is the same principle as Bitcoin, which works the same way for everyone as a neutral protocol,” he said. “From a safety standpoint, I think it's actually very dangerous for the world to go into this next phase where everyone is being watched all the time. To me, that's actually much more dangerous than any particular person asking controversial questions or questions that come across as bad.”
There's also a lot of emphasis on giving users agency. Users are free to choose from AI models that can generate text, images, audio, and video. All of these models differ in performance, quality, and amount 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're optimizing for freedom and actually respecting our users as adults, which I think is rare these days,” Voorhees said.
Venezia is also working to instruct some open models to answer system prompts more openly, but does not place any restrictions on the models, the founders said.
Naturally, there are two crypto tokens associated with this effort. Voorhees said Venice launched a token called VVV in early January to attract users, and added another called DIEM last August. Users can buy VVV and bet it on minting DIEM. This will generate $1 worth of AI credits per day to be used in Venice. However, Voorhees said only about 8% of the company's users pay with cryptocurrencies.
The founder believes the company's growth is due to the good performance of crypto tokens, but said the strongest driver is approaching feature parity with ChatGPT. “When we launched, we were a long way from what you could do with ChatGPT, but people used us because it was private, and today we are very close to what you can do with ChatGPT. […] So as we close that gap, it becomes an increasingly attractive option,” he said.
Looking to the future, Venice AI wants to use its new cash to start buying GPUs and building its own data center, and to stop leasing GPUs and increase its gross profit.
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