“GenAI Made Easy: Introducing Arcee – The Reliable and Enterprise-Centric Platform”

Hugging Face was a well-known company in the realm of AI, with engineers Mark McQuade and Brian Benedict leading the charge. However, their efforts to help enterprise customers adopt GenAI came with their fair share of challenges. Many companies were hesitant to use closed-source AI APIs due to the lack of transparency, but they also had reservations about open source models for security purposes. McQuade revealed, “The primary hurdle we faced was gaining the trust of businesses when it came to existing generative AI systems, specifically concerning performance and security.”

McQuade, who had previously worked at Rackspace and computer vision startup Roboflow, was determined to find solutions elsewhere. Unfortunately, his search came up empty. So, together with Roboflow’s Head of Machine Learning Jacob Salowetz and Benedict, he embarked on a journey to build a platform from the ground up. Their goal was to create a secure compute environment that would enable organizations to build and train their own GenAI models. In February of last year, they launched their platform, Arcee, which is maintained by their Miami-based startup of the same name. To date, Arcee has received $5.5 million in venture funding from notable investors like Long Journey Ventures, Flybridge, Centre Street Partners, Wndrco, 35V, AIN Ventures, and Hugging Face’s CEO and co-founder Clément Delangue.

According to McQuade, “Arcee is a game-changer in the world of AI, particularly for highly regulated industries such as legal, healthcare, insurance, and financial services.” He explains, “Our platform allows these sectors, as well as any organization with proprietary data, to build customized language models using their own data securely within their own cloud environment.”

The rise of GenAI has sparked the emergence of several startups aiming to tackle the same problem that McQuade encountered – training private enterprise models securely and efficiently. One such company is Contextual AI, which provides tools to tailor GenAI models, specifically large language models (LLMs) similar to OpenAI’s ChatGPT, to fit business use cases. Other players like Giga ML offer tooling to help companies deploy LLMs offline, while Reka builds custom models for corporate applications, such as document analyses.

So what sets Arcee apart from these competitors? According to McQuade, there are a few key differentiators. First and foremost, Arcee’s platform is end-to-end, utilizing an adaptive system for training, deploying, and monitoring GenAI models. Additionally, it operates in a virtual private cloud, allowing for enhanced fine-tuning and security measures to mitigate privacy risks. This emphasis on security is vital, as surveys have shown that it is a top concern for enterprises. In fact, a recent survey by Salesforce found that 71% of IT leaders anticipate that generative AI will introduce new security risks to data.

McQuade states, “Arcee’s approach allows organizations to build and train these models within their own secure environments. Not only does this guarantee data privacy, but it also grants businesses full ownership of their AI models and technology stack.”

While Arcee’s initial backers have faith in their platform’s success, they are aware that there is still a long road ahead. According to Flybridge’s Jesse Middleton, “Our investment in Arcee was driven by three key factors. Firstly, industry analysts estimate that 2.5% of all enterprise software spending is currently on AI applications. As the AI market continues to boom, Arcee is uniquely positioned as a standout player in industry-specific solutions. Secondly, the team’s expertise and early success in securing multiple Global 2000 customers demonstrate a deep understanding of market demands. Lastly, Arcee’s innovative solutions are exactly what the current AI landscape demands, making it a prime time to invest in the future of AI and small language models within enterprises’ various departments.”

However, the question remains: is there enough demand for GenAI in the enterprise to support another platform? This concern is a valid one, as evidenced by a recent Boston Consulting Group survey of over 1,400 C-suite executives. Only about half of the respondents felt that GenAI would bring significant productivity gains to their workforce. Another poll by BCG found that more than half of executive decision-makers were discouraging GenAI adoption due to fears of encouraging bad or illegal decision-making and compromising data security.

Despite these concerns, McQuade firmly believes that with the right support from customers and investors, Arcee can stand out and excel in the market. He confidently asserts, “The capital we have raised so far will enable us to expand our team, continually improve our platform, and venture into new markets.” McQuade goes on to add, “Our enthusiastic clients have proven to us that we are not just filling a gap in the market, but are actually leading the way in AI innovation.” While he declined to name specific clients, he states that Arcee is committed to creating value for investors, partners, and customers, with a strong focus on technological and market advancements rather than financial metrics.

In conclusion, McQuade’s optimism may not be unfounded, especially when it comes to investment prospects. Pitchbook reports that in 2020, VC investments in GenAI startups totaled $21.4 billion by September, a significant increase from the $5.1 billion invested in 2019. Assuming the trend continues, there is no doubt that the dollars will continue to flow freely for innovative solutions like Arcee.