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Scottish startup Malted AI snaps £6M to solve issues related to LLMs

Malted AI team
Picture credits: Malted AI

Currently, there is too much focus on artificial general intelligence (AGI) and not enough focus on solving concrete problems. This leaves businesses struggling to extract value from AI tech. Edinburgh-based Malted AI is shrinking models and creating small language models (SLMs) that can solve specific, complex problems using a technique called distillation. 

Malted AI, the Scottish AI startup, that helps enterprises build smaller, more focused AI models with greater performance at a fraction of the cost, has secured £6 million in seed investment. The round was led by Hoxton Ventures (which invested in Cogna and Heura Foods) and joined by Creator Fund and angel investors. It has raised £7 million in total investment, thanks to a £1 million pre-seed round led by Creator Fund in August 2023.

The company will use the new seed funding to invest in research, product development, and recruitment as it doubles the team size. The firm’s technology is already being used by financial and legal firms in its first pilots, with further rollout planned for the rest of 2024.

Who is behind Malted AI?

Malted AI was founded by maths genius, quant trader, and ex-Meta engineer – Iain Mackie, Federico Rossetto, and Carlos Gammel, using concepts that helped them win the Amazon Alexa Prize in 2022. Now, it is a 10-strong team with a track record in AI innovation hailing from Deepmind, Amazon, and Google, and top PhDs, postdocs, and academics from Scottish Universities. 

Segments AI models 

Malted AI takes the output of large models (like ChatGPT) and distils them into smaller models. Existing LLMs are overly general and result in very expensive enterprise solutions lacking the required pinpoint accuracy and performance. Malted AI’s technology is the solution for jobs that general AI is not capable of solving. It allows enterprises to apply SLMs that solve domain-specific problems with massive cost savings. Instead of doing thousands of tasks moderately well, Malted AI’s SLMs do one task nearly perfectly.

Notably, it is a fresh, new approach that allows businesses to solve high-value problems that make AI something that works for them.

“At Malted AI we see smaller as better when it comes to AI. A single, many-billion parameter foundation model is costly, too general and too slow – it’s not fit for purpose for the complex challenges enterprises face,” said Iain Mackie, Malted AI’s CEO and co-founder. “We are building a world-leading distillation platform that solves the highest value enterprise problems. We do this by using cost-effective small language models (SLMs) that take the most useful parts of LLMs but with a performance exceeding its bigger ‘sibling’ at specific tasks that require domain knowledge. We envision enterprises using Malted AI to build small models to address singular challenges, effectively building a network of proprietary SLMs that are optimised for a single problem.”

Bryan Gartner, Partner at Hoxton Ventures, said, “Malted AI has the capacity to be one of Europe’s most notable AI companies as they flip the thinking and approach to AI adoption within the enterprise. Iain, Carlos and Federico are some of the brightest AI minds emerging from the birthplace of European AI – Edinburgh – and have close ties to the University of Edinburgh and the University of Glasgow. We are thrilled to be supporting Malted AI as they commercialise their platform and deliver outsized results for businesses in the tiny package of small language models.”

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