Fears regarding AI chatbots’ influence on mental wellness, personal security, harassment, and misinformation have compelled AI creators to introduce measures that enhance oversight of their AI models’ responses and actions.

However, apprehensions cannot diminish the demand. AI holds vast potential, and individuals are reluctant to allow an impersonal tech entity to limit their access to that opportunity. If they can maintain their privacy while utilizing AI models freely, why shouldn’t they?

Venice AI, which provides entry to over 200 AI models while ensuring user privacy, is thriving in response to this demand. Just two years from its inception, the enterprise boasts more than 850,000 distinct visitors to its website, serves over 3 million active users, and handles an average of 1.7 million API requests daily.

The startup maintains “uncensored,” open-source models on its own data centers, directing queries to closed-source models, including those from OpenAI or Anthropic. All user inputs are encrypted and decrypted client-side, routed through an external proxy prior to processing and return, with no information retained on Venice’s systems. It also offers end-to-end encryption on certain models, though a subscription is required for that feature.

The company is already in the black, with annualized revenue run-rate exceeding $70 million, as its CEO Erik Voorhees (depicted above, at the center) disclosed in an exclusive interview with TechCrunch.

Naturally, investors have rushed to claim a portion of that momentum. On Wednesday, Venice AI announced it has secured $65 million in a Series A funding round at a $1 billion valuation, marking its first external fundraising effort. The round was spearheaded by the crypto-oriented venture firm Dragonfly, with involvement from Coinbase Ventures, North Island Ventures, and others.

The connection between Voorhees, Venice’s commitment to privacy, and its new crypto investors is striking, particularly in light of the CEO’s history and prior endeavors. A pioneer in bitcoin advocacy, Voorhees has founded several crypto enterprises, such as the bitcoin gambling platform Satoshi Dice and cryptocurrency exchange ShapeShift, and has long championed the preservation of user privacy.

Indeed, when a Wall Street Journal investigation accused ShapeShift, which originally did not require user identification, of processing millions of dubious funds, Voorhees allegedly remarked: “I don’t believe individuals should have their identity documented to apprehend an occasional wrongdoer.”

He conveyed a similar sentiment when questioned about Venice AI’s approach to offering access to AI models in light of recent incidents of AI-induced psychosis and consequent harm, stating his team views their service as a “neutral tool or a neutral platform.”

“This principle mirrors that of Bitcoin, where Bitcoin, as a neutral protocol, functions uniformly for everyone,” he stated. “I believe it’s actually rather perilous from a safety standpoint for society to step into this next phase and have everyone under constant surveillance. To me, that is considerably more hazardous than any specific individual posing a controversial query or something that could be deemed inappropriate.”

There’s a significant emphasis on granting users autonomy as well. Users can select from AI models that generate text, images, audio, and video — each varying in performance, quality, and the extent of censorship applied. The website prominently displays several AI “characters” for personalization and interaction, and the company takes pride in providing an “uncensored” experience.

“We’re focused on freedom and genuinely respecting users as adults, which I believe is uncommon these days,” Voorhees remarked.

The founder indicated that Venice also enhances some open models’ system prompts to encourage more open responses, though it does not impose any restrictions on the models.

Unsurprisingly, there are two crypto tokens linked to this initiative. Venice introduced a token named “VVV” in early January, aiming to attract users, according to Voorhees, and in August of the previous year launched another, termed “DIEM.” Users can purchase VVV and subsequently stake it to mint DIEM, generating $1 worth of AI credits daily that can be utilized on Venice. However, Voorhees noted that only about 8% of the company’s users transact with crypto.

The founder attributed the company’s expansion to the robust performance of the crypto tokens, although he stated that the primary driver was achieving feature parity with ChatGPT. “When we started, we were quite distant from what ChatGPT could deliver, but people chose us because of privacy. Today, we are very close to what ChatGPT can achieve […] and as we bridged that gap, it has become an increasingly attractive alternative,” he stated.

Looking ahead, Venice AI intends to utilize the new funding to begin acquiring GPUs and constructing its own data centers to eliminate GPU leasing and enhance its gross margins.