What is Sakana AI and why is everyone comparing it to OpenAI?

Tokyo-based AI startup Sakana AI may achieve unicorn status in less than a year after its founding. Here’s what you need to know about the company, its former Google founders, and why it’s being called a rival to OpenAI.

While AI startups are saturating the market (which is why we have an entire weekly column, Neural Notes, dedicated to them), there are a few things working in Sakana AI’s favour.

Sakana AI’s Google origins

Launched in July 2023, Sakana AI was co-founded by David Ha and Llion Jones, both former Google researchers, along with Ren Ito, a former executive at Mercari and an official at Japan’s Ministry of Foreign Affairs.

This pedigree is further supported by the larger founding team that hails from Google Brain, Google DeepMind, the Tokyo Institute of Technology, and the Japan National Institute of Informatics

The company’s unique approach, inspired by principles from nature such as evolution and collective intelligence, has set it apart in the AI landscape.

A unique approach to AI rooted in nature

Sakana quickly garnered attention for its unique approach to AI, which leverages the collective behaviours of animal groups like schools of fish (‘sakana means ‘fish’ in Japanese) and flocks of birds.

The idea is for Sakana AI to use smaller, collaborative models over large, monolithic systems, in order to reduce the computational resources and environmental impact.

There is also a focus on using LLMs to automate model development, which is something the company talks quite a bit about on its blog.

Sakana AI employs evolutionary algorithms to automate the development of these models. Sakana indicates that this method mirrors the natural selection process, where multiple models with different capabilities are combined and refined over generations to create efficient AI systems.

“Our logo is meant to invoke the idea of a school of fish coming together and forming a coherent entity from simple rules as we want to make use of ideas from nature such as evolution and collective intelligence in our research,” Sakana AI in a blog post titled ‘We raised $30M to develop nature-inspired AI in Japan’.

“The red fish swimming away represents our desire to not simply do what everyone else does, but to pursue what we believe is coming next!”

How much has Sakana AI raised?

It’s important to remember that Sakana AI isn’t a unicorn yet.

The company raised US$30 million in seed funding in January, led by Lux Capital, and with strong participation from Khosla Ventures.

Both VCs have a long history with AI investment, with Lux supporting the likes of Hugging Face and Runway, and Khosla being the earliest institutional investor in OpenAI.

Sakana is currently hoping to raise another US$125 million specifically from US investors such as New Enterprise Associates and former investors Khosla Ventures and Lux Capital.

If successful, this will give it a valuation of US$1.1 billion.

Funding is being used to accelerate Sakana AI’s generative AI research. The company aims to develop innovative generative AI systems that require relatively low cost and power.

Is Sakana AI a rival to OpenAI?

Considering its possible trajectory and hitting a US$1 billion valuation in under 12 months — it is unsurprising that Sakana is being compared to OpenAI.

While every tech giant in the world is getting in on the AI game — OpenAI really did kick off the public generative AI renaissance with ChatGPT.

You could also draw parallels between OpenAI and Sakana’s roots. While the former is now an AI behemoth — to the point where most big tech companies are either utilising its tech or investing in it — it started its life as a non-profit.

In fact, its pivot to a for-profit model is what Elon Musk points to as the reason why he left the business, started a rival AI company and chatbot, and is now threatening to ban Apple products from his companies if they go through with their OpenAI partnership.

Sakana certainly isn’t trying to be a non-profit, but its raison dêtre does appear to be in direct opposition to the power and resource-hungry LLMs that are currently pedalled around the global market.

And this is critical when there are estimates that by 2026, AI data centre energy usage could increase to between 620 and 1,050 TWh which is roughly the same as powering the entirety of Germany.

Of course, it is still a fledgling company. Things can change very quickly, particularly in the AI landscape.

Unlike OpenAI, it doesn’t currently have a customer-facing product. It’s still in the research and development stage and it’s unclear when will even have a consumer product in the future.

That being said, if it does happen and the company can position its Gen AI as more cost-effective due to less power consumption — this would position Sakana as a significant player, particularly for businesses that want AI that can scale but won’t cost an arm and a leg.

But we’re not there yet, and it also still has a way to go on the finances.

To date, OpenAI has raised around US$11.3 billion. Meanwhile, as of January, Sakana had raised US$30 million in seed funding. Even if it does pull off its next raise — which is aiming for US$125 million — and hits that unicorn status, that’s still a far cry from what OpenAI has netted over the last nine years.

It is too early to say whether Sakana is or will be a rival to OpenAI. But considering the latter’s pivot, the cost of AI, and its ongoing issues with safe and ethical AI implementation — if Sakana were to stay true to its mission, perhaps a better way to think of it is the antithesis of OpenAI.

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