Liberty Mutual's route to GenAI: Data chops and FinOps

Welcome to Runtime! Today: Liberty Mutual CIO Monica Caldas explains how the insurance company quickly rolled out an internal generative AI app, former OpenAI CTO Mira Murati surfaces with a new company, and the latest funding rounds in enterprise tech.

(Was this email forwarded to you? Sign up here to get Runtime each week.)

No emu required

Long before the generative style hit the scene, insurance companies were using AI to model risk and detect fraud. But while businesses continue to struggle to implement generative AI apps in production, Liberty Mutual's 2023 decision to build an internal version of ChatGPT for its employees was made easier thanks to the data foundation and spending-management tools it had already built.

"We've had this scaffolding of, how do you build models? How do you actually test the models? What is the data pipeline for that? How do you use internal sources of data to improve your model accuracy?" said Monica Caldas, CIO of Liberty Mutual, in a recent interview. "All these questions of governance have been things that we've been thoughtful about for a long time."

• LibertyGPT is an internal application that is currently being used by more than 10,000 Liberty Mutual employees to summarize information and answer common questions.
• An early version was built in just two weeks after Microsoft made OpenAI's LLMs available to enterprises and since then, Liberty Mutual has expanded the app to include several different AI models and handle the unique needs of different departments across the company.

There were several factors beyond prior AI expertise that allowed Liberty Mutual to launch its generative AI app quickly and refine it in production. When ChatGPT dropped in late 2022, the company had already migrated most of its workloads to the cloud and implemented FinOps, the cloud cost-management discipline that is taking on new importance in the generative AI era given the current cost of inference.

• "Everybody wants to use the Ferrari, but if you're just going down the street, you might just need a bike," Caldas said.
• The company built a "FinOps for AI" team across the technology and finance organizations that creates models based on proposed additions to LibertyGPT and tries to evaluate how much the app will cost to operate as its mandate expands.
• Right now, LibertyGPT is serving just 10 use cases and it's easy for the company to track its spending, but Caldas expects that to change as the app scales across the entire 40,000 person company.
• And she thinks that process will become more complex as generative AI vendors experiment with different pricing strategies, such as moving from traditional subscription-based pricing to consumption-based pricing.

But she emphasized that the company's fiscal discipline around technology spending is what really allowed Liberty Mutual to quickly embrace generative AI tools.

• After years of throwing money at technology projects, big businesses around the world tightened the reins amid inflation concerns and rising interest rates over the last two years, and Liberty Mutual was no exception.
• But the pressure to embrace generative AI tools has created a problem for CIOs who still need to keep their entire pre-existing digital operation up and running with a flat or slowly growing budget, and Microsoft's second-quarter earnings results showed that some of them are spending less on non-AI technology in order to experiment with generative AI.
• "We have taken our budget down about 4%. We created capacity" for projects like LibertyGPT by reducing the company's application footprint by 20%, Caldas said. "We are not taking away from our journey to the cloud in order to go fund AI."

Read the full story here on Runtime.

Model intelligence

Mira Murati played a crucial role in the development of OpenAI before leaving the company last September after a particularly volatile year of internal changes. On Tuesday she launched her new venture, Thinking Machines, which is "an artificial intelligence research and product company" run by several former OpenAI engineers and leaders, including co-founder John Schulman and researcher Barrett Zoph.

It's not clear exactly what Thinking Machines will be working on, but it seems apparent that the company wants to compete with the likes of OpenAI, Anthropic, Google, and Meta to push the foundation model envelope. "We're building Thinking Machines Lab to make AI systems more widely understood, customizable and generally capable," the company said in an introductory statement.

"In total, she has poached about 10 top researchers and engineers from elite AI labs, including OpenAI, Character.AI, and Google DeepMind," according to The Verge. It's also not clear how much Thinking Machines has raised in funding, but you don't need a large-language model to predict that investors were clamoring to write a check.

Enterprise funding

EnCharge AI raised $100 million in Series B funding for its analog in-memory-computing AI chips, which could allow sophisticated AI workloads to run on small devices rather than inside massive data centers.

Dream also scored $100 million in Series B funding to expand its cybersecurity services, which were designed for high-profile targets like government agencies and hospitals.

Hightouch landed $80 million in Series C funding as it builds out a new agentic AI product called AI Decisioning alongside its customer data platform.

Fal raised $49 million in Series B funding for its AI-generated video platform, which helps enterprise developers add video content to their sites and apps.

Koala scored $15 million in Series A funding as it builds out a "sales execution platform" for reps that want to create personalized pitches during the early stages of the sales pipeline.

Suger.io landed $15 million in Series A funding for its cloud marketplace software, which helps B2B companies list their wares on various vendor marketplaces without duplicating a lot of effort.

The Runtime roundup

Intel's stock soared Tuesday after the Wall Street Journal reported that Broadcom is looking at buying its chip design business while TSMC remains in play for the manufacturing business.

Deepwatch acquired Dassana, with plans to integrate its cybersecurity risk-management software into Deepwatch's managed security platform, for an undisclosed price.

Thanks for reading — see you Thursday!