Venice AI has closed a $65 million funding round at a $1 billion valuation, founder Erik Voorhees announced Wednesday — a major milestone for a startup positioning itself as a privacy-first alternative to mainstream chatbots like ChatGPT.
What happened
- The round, described by Voorhees as Venice’s first outside funding, was led by Dragonfly and included participation from North Island Ventures, Coinbase Ventures, Archetype, Liquid2 Ventures, and Morgan Creek.
- Venice launched in May 2024 and says it reached 3 million users in April. Voorhees also stated the company was profitable in Q1 while “AI firms were losing money while spying on you.”
Product and positioning
- Venice AI markets itself as a privacy-focused chat platform that avoids storing user conversations on centralized company servers. It offers access to both leading open-source and proprietary models through a single interface and API.
- Voorhees framed Venice’s mission in ideological terms: the company aims to resist “ubiquitous centralized surveillance and control” and to preserve private, uncensored AI interactions.
Token reaction and supply change
- Venice’s native token, VVV, jumped after the announcement. CoinGecko data cited by the company put VVV at $13.74, up about 11% over the prior 24 hours.
- Venice also trimmed VVV emissions to 3 million tokens per year. Those emissions are distributed to token holders who stake VVV to support the network, meaning fewer new tokens will enter circulation annually.
Philosophy and risks
- While many AI leaders (including Anthropic’s Dario Amodei and OpenAI’s Sam Altman) have focused public warnings on risks such as job displacement and model safety, Voorhees pressed a different concern: the erosion of privacy as AI becomes intertwined with human thought. “Perhaps it is not job losses or cybersecurity incidents that should most frighten us, but rather that our flow of consciousness is increasingly under examination,” he wrote.
- Voorhees said the new capital will be used to expand Venice’s platform and to pursue what he described as First and Fourth Amendment-style protections for how humans interact with machine intelligence. He framed the product as “an open, permissive port city that respects the sovereignty of its inhabitants, both human and agentic.”
Regulatory backdrop
- The raise comes amid growing scrutiny of AI privacy in Washington: lawmakers have introduced bills that would require warrants for AI-assisted government surveillance, and federal agencies like the FBI are increasing their use of AI for investigations, threat analysis, and facial recognition.
Why it matters
- Venice’s raise and $1 billion valuation highlight investor appetite for alternatives that prioritize privacy and decentralization in AI — a narrative that resonates strongly in crypto circles. The combination of user growth, reported profitability, and token-supply tightening will likely keep VVV and Venice on the radar for both crypto investors and policymakers tracking AI privacy developments.
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