AI developers have been compelled to add protective measures due to worries about how chatbots affect mental well-being, personal safety, harassment, and false information. However, such worries have not dampened demand. People see AI's great potential and do not wish to be limited by an impersonal corporation.
And if they can maintain privacy while freely using AI models, why wouldn't they? That demand has turned Venice AI into a unicorn - a private startup worth over $1 billion.
On Wednesday, Venice AI announced its first external fundraising: a $65 million Series A at a $1 billion valuation. Dragonfly led the funding round, joined by Coinbase Ventures, North Island Ventures, and other backers.
The growing demand for private, uncensored AI alternatives has been a major driver. Unlike mainstream chatbots that log conversations and enforce content filters, Venice AI positions itself as a neutral protocol similar to Bitcoin. CEO Erik Voorhees previously founded crypto companies Satoshi Dice and ShapeShift, bringing a strong libertarian ethos to the venture.
The company runs its own data centers with uncensored open-source models and also directs queries to proprietary models like those from OpenAI or Anthropic. User data is encrypted and decrypted on the client side, then sent through an external proxy for processing; Venice does not store any data.
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CEO Erik Voorhees said, "We're optimizing for freedom and actually respecting users as adults, which is, I think, rare these days." He compares the platform's neutrality to Bitcoin: "This is the same principle that you have in Bitcoin, where Bitcoin, as a neutral protocol, works the same way for all people. I think it's actually quite dangerous from a safety perspective, for the world to enter this next phase and have everyone be constantly watched. To me that is actually much more dangerous than any particular person asking a controversial question or something that might be considered bad."
Only about 8% of the company's users pay with crypto. But the company has two crypto tokens - VVV and DIEM - tied to its service. The platform allows users to purchase VVV tokens, stake them to create DIEM tokens, which in turn produce $1 in AI credits daily. In an earlier interview with the Wall Street Journal, Voorhees said: "I don't think people should have their identity recorded to catch an occasional criminal."
Venice AI currently leases GPUs from cloud providers. Those chips are essential for running AI models. But leasing cuts into profit margins. Venice intends to use the fresh funds to purchase graphics processing units and construct its own data centers, ending the need to lease and boosting profit margins.
Voorhees noted that when Venice AI launched, it was far behind what ChatGPT could do. "But people would use us because it was private. And today, we're very close to what ChatGPT can do … so as we've closed that gap, it's become an increasingly compelling alternative."
Venice AI offers access to more than 200 AI models.
Venice AI's dual-token system - VVV for staking and DIEM for daily AI credits - creates an economic incentive that aligns user engagement with the platform's privacy mission. The company's profitability, even while leasing expensive GPU capacity, signals strong demand for uncensored, confidential AI.
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