Before we get to today's column, my colleague Valida and I reported Tuesday that Canadian AI model maker Cohere is in talks to raise up to $500 million in a new funding round at a $6.3 billion valuation. Existing investors Inovia Capital and Radical Ventures are in talks to invest in the round.

This company recently generated revenue at an annual pace of $100 million. At a $6.3 billion valuation, this implies a forward revenue multiple of roughly 60, steeper than other AI model makers.

OpenAI, for instance, recently generated $10 billion in annualized revenue and is fundraising the second installment of a round that values it at $260 billion—or 26 times its revenue.

Anthropic’s new funding round that values it at $170 billion is about 42 times its annualized revenue of $4 billion.

But Cohere’s revenue is catching up to its valuation. The company has projected hitting at least $200 million in annualized revenue by the end of this year, which would put its revenue multiple at about 31, in line with peers. Contrast that to a multiple of 140 from when it raised money last year at a $5 billion valuation when it was just generating about $35 million in annualized revenue.