Jordan Jacobs on AI’s ‘profound’ implications, responsible development – and why he backed Cohere

A key figure in Canada’s burgeoning artificial intelligence scene, Jordan Jacobs boasts a track record of backing ventures at the vanguard of AI development – and the University of Toronto often plays a prominent role.

Jacobs and U of T alumnus Tomi Poutanen have co-founded some of the most influential entities in Canada’s AI ecosystem, including Layer 6, which was acquired by TD Bank Group in 2018; the Vector Institute, a world-renowned AI research hub that counts U of T among its early partners; and venture capital firm Radical Ventures, where Jacobs currently serves as managing partner. 

He’s also a founding investor and board director of Cohere, a leading developer of enterprise-focused AI technologies founded by former U of T computer science students Aidan Gomez, Nick Frosst and Ivan Zhang – and backed by AI luminaries University Professor Emeritus Geoffrey Hinton and Professor Raquel Urtasun.

Now, Jacobs is sharing his insights at the Future of Money conference, co-produced by Cohere and U of T’s Munk School of Global Affairs & Public Policy, where he’ll take part in an AI-focused fireside chat alongside Cohere chief product officer and U of T alumnus Jaron Waldman.

U of T News caught up with Jacobs ahead of the event to discuss how companies like Cohere are tapping into the deep pool of talent at U of T and beyond to forge AI-powered solutions to the world’s most pressing problems.

We’ve seen some incredible advancements in AI over the last year or so and heard some alarming warnings about the risks it could pose. What’s your take on how AI is evolving?

Over the next decade, virtually every bit of software will be replaced by artificial intelligence or embedded with it. The implications for our world and the global economy are profound.

Traditional software is hard-coded and static. Once shipped and deployed, it never improves until the next version is shipped and replaces it. Soon, all software will be powered by AI that learns and improves, often in real-time. Built around learning algorithms that adapt to new situations, AI software is more efficient and effective. This is particularly true for generative AI, which can create new data or software code on its own, without the need for human input. 

This coming software replacement cycle will have an extraordinary impact on our economy. In addition, AI will help unlock new discoveries across science. These are Industrial Revolution-sized opportunities – happening simultaneously and enabled by one technology.

One of my personal motivations for starting Radical was to invest in companies that would help solve the biggest challenges facing humanity. When we were thinking of selling our AI company, Layer 6, to focus on building the leading AI investment firm, I said to my Radical co-founder and University of Toronto alum, Tomi Poutanen: “AI will help cure cancers. Let’s help cure cancer.” 

How would you describe venture capital’s role when it comes to responsible AI development?

Venture capital is an essential driver of economic value and innovation. Only half of one per cent of public companies received venture funding, but VC-backed companies account for 40 per cent of total U.S. market capitalization. VC plays a disproportionate role in the economy, especially when it comes to the development of new technologies such as AI. OpenAI, Cohere and the startups behind the large language models that helped bring AI to the mainstream over the past year received multiple rounds of funding from venture capital firms. Google and Meta – whose industrial labs created some of the biggest AI breakthroughs of the last decade – were, at one time, fuelled by venture capital. 

At Radical, we are committed to developing AI technologies and applications that improve the future for all, and we believe that the venture capital industry – the underwriters of tomorrow’s innovations – must approach investments in AI with a sense of shared responsibility. Last year, in partnership with the Vector Institute, we launched the Responsible AI for Startups (RAIS) framework – an open-source resource for investors evaluating investments in AI technologies. RAIS is a practical tool to help VCs assess early-stage AI companies and technologies across responsibility and safety considerations.

Let's talk about Cohere, a startup that has numerous U of T ties and several high-profile backers, including yourself. How is it different from other companies developing large language models?

Cohere is one of a cohort of companies, including OpenAI and Google DeepMind, that is developing the world’s most sophisticated large language models. Unlike most competitors in the space, Cohere’s focus is offering a cloud-agnostic, privacy-preserving solution for enterprise customers, which include Oracle and McKinsey. 

Cohere’s founders are three Canadian entrepreneurs [and former U of T computer science students]: Aidan Gomez, the company’s CEO and one of the authors of the groundbreaking transformers paper that ushered in the era of modern generative AI; Nick Frosst, protege of deep learning pioneer and [University Professor Emeritus] Geoffrey Hinton, and their classmate Ivan Zhang. Today, the team includes many of the inventors of some of the most widely used modern AI techniques. 

How would you describe Cohere's growth to date — and where do you see it heading in the future?

Radical was deeply engaged with Cohere prior to company incorporation and invested the very first cheque into the company in 2019. Since then, Cohere has developed world-class language models that compete directly with the best models in the world, grown the team to more than 200 people across offices in Toronto, San Francisco, New York City and London, and signed many global enterprises as customers. It is now one of the most valuable AI companies in the world. Given the technical complexities of working with cutting-edge AI models, there are few companies that have the experience and expertise to push the field forward while also delivering huge value to industry. Cohere leads the pack.

What advice would you give researchers or students who are keen on building a company in the AI space?

Tackle the most important problems. Building a business aimed at making incremental advances on existing technologies may find a market in the near-term. However, in the long run, these businesses are vulnerable to competition or commodification by existing AI solutions. Whether it’s tackling climate change, increasing business productivity or curing cancer, AI is a technology capable of taking on many of the world’s biggest challenges.

It’s also important to remember that we are still in the very early innings of the AI revolution. The field will continue to evolve and change. There’s a very real opportunity right now for young entrepreneurs to shape the future of this important technology.