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London Tech Week

OpenAI alum’s Daedalus secures $21M to revolutionise manufacturing with AI

Daedalus funding
Picture credits: Daedalus

Human technology may have taken a while to get going, but once we started to innovate, the pace of technological development has been accelerating exponentially. To put this into perspective, it took our earliest ancestors 2.4 million years to master the concept of using fire to cook with. By contrast, fast-forward to the twentieth century and it only took 66 years from the Wright Brothers’ first powered flight to Neil Armstrong taking that “one giant leap for mankind”.

The quicker our development accelerates however, as too does the frequency of problems and obstacles that threaten to stall future progress. One such problem that affects businesses in the manufacturing industry, especially dealing with cutting edge technology and innovation, is re-tooling, re-training, finding the right employees, or even outsourcing when their current setup is not able to fabricate new components that are required.

Technology company Daedalus, led by former OpenAI Technical Lead Jonas Schneider, and based in Karlsruhe, Germany, specialises in overcoming the hurdles many manufacturing companies and departments struggle with. Daedalus has just announced it has successfully raised $21 million in its Series A funding round. The investment, led by NGP Capital and featuring participation from existing investors Addition and Khosla Ventures, will propel the development of Daedalus’ proprietary Manufacturing AI Platform and the expansion of its production facilities in Germany.

Transforming manufacturing with AI

Daedalus is on a mission to build the world’s most advanced factories, using artificial intelligence (AI) to revolutionise the production of bespoke, precision parts. The company’s vision is to create autonomous and instantly reconfigurable factories that redefine how high-precision and high-mix parts are manufactured.

The unique software-driven and vertically integrated approach employed by Daedalus leverages its proprietary Manufacturing AI Platform. This platform orchestrates and automates the entire manufacturing process, starting from quoting and extending to delivery. The focus is on achieving precision and efficiency in the production of diverse and complex parts.

Daedalus aims to enable sectors such as semiconductors, energy, mobility, and pharmaceuticals to source and deliver mission-critical products reliably and at scale. The company’s customers already include leading names in semiconductor, energy, e-mobility, defence, and pharmaceutical industries, relying on Daedalus for precision manufacturing of their mission-critical bespoke components.

Funding allocation and growth plans

The newly secured $21 million funding will be instrumental in advancing Daedalus’ Manufacturing AI Platform and scaling up production facilities in Germany. The company is committed to creating the world’s first autonomous and instantly reconfigurable factories that leverage AI to achieve unprecedented precision, reliability, and speed in manufacturing.

Jonas Schneider, Founder and CEO of Daedalus, envisions factories equipped with the collective knowledge and expertise of all engineers and machinists who have ever worked in them. The goal is to make flexible and updatable precision manufacturing easier to access for both established businesses and startups by removing many of the obstacles they face. The funding will support the expansion of production capacity to meet growing customer demand, along with investments in product development and hiring.

“The conversations we have with our customers paint a shocking picture of the state of precision manufacturing. Our software-driven factory has already alleviated some major pain points, but we are still only beginning our journey. While we have already out scaled more than 50,000 incumbents, there is still $100B in annual demand we have not yet touched in Germany alone, and we’re seeing demand from our existing customers exceed our capacity several times over. At the same time, we see many software features we can build to improve customer experience and internal efficiency further. To address both of these opportunities, we have decided to raise this additional capital and are happy to have found a great new partner in NGP Capital, with strong support from our existing investors.”

Christian Noske, Partner at NGP Capital, emphasised their belief in the transformative potential of AI in massive and complex industries.

“We believe that the companies bringing the value of AI to massive and complex industries will be the tech giants of the 21st century. We see precision manufacturing as the ideal market to build a defensible moat by building a vertically integrated solution that deeply and directly connects AI-powered automation to complex value chains in a massive industry with high barriers to entry.”

Schneider’s vision for precision manufacturing

Schneider graduated from the Karlsruhe Institute of Technology (KIT) in Computer Science before moving to Silicon Valley, where he first worked on distributed systems at Stripe before becoming Technical Lead and the first engineer hired at OpenAI. While at OpenAI he co-founded and led software engineering for OpenAI’s Robotics team, advancing machine learning and AI research through software+ML+hardware systems that learn to interact with the physical world.

Despite a global annual turnover of precision parts exceeding half a trillion USD, the precision manufacturing industry faces challenges. A highly fragmented supplier landscape, consisting of over 100,000 machine shops, coupled with a labour shortage of experienced machinists, calls for improved reliability and scalability in the supply chain. Schneider’s realisation of this and his background at OpenAI inspired him to found Daedalus.

Daedalus seeks to address these challenges through its software-driven and highly automated production facilities. The company has already outpaced over 50,000 competitors, but with demand surpassing capacity and untapped opportunities, the additional capital will facilitate further growth and innovation.

“Imagine factories that possess the collective knowledge and expertise of all engineers and machinists who have ever worked in them and can produce the most challenging parts with superhuman reliability and 10x efficiency.” Concludes Schneider. “Daedalus is already making that vision real by revolutionizing how we build everything from microchips to critical medical components—unleashing the potential of numerous industries with our AI-powered factories that forge bespoke parts on demand. Today’s funding will enable us to grow our production capacity to meet customer demand while investing in product development and hiring.”

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