Venice AI Reaches $1 Billion Valuation on Promise of Full Privacy

Venice AI, a two-year-old startup building a private and largely uncensored alternative to ChatGPT, has closed its first outside funding round at $65 million on a $1 billion valuation. It's the first external capital the company has taken, having grown so far entirely on its own revenue.

The Round and Its Backers

The round was led by Dragonfly, a fund known for its crypto investments, with participation from Coinbase Ventures, North Island Ventures, F-Prime Capital, Archetype, Morgan Creek and Liquid2 Ventures, among others. The presence of crypto-focused funds is no coincidence: Venice AI has combined access to language models with its own cryptocurrency from the start.

The company was founded by Erik Voorhees, one of the more recognizable figures from the early days of the bitcoin industry and the creator of Satoshi Dice and ShapeShift. Jesse Proudman, based in Seattle, serves as CEO and CTO. The team numbers around 45 people, all working remotely, a small headcount for a company valued at $1 billion.

A Model With No Conversation Logging

Venice AI provides access to more than 200 text, image, video and audio models, including its own uncensored open-source models run on the company's own infrastructure, as well as closed models from OpenAI and Anthropic reached via an external proxy. The key difference from competitors is that prompts and responses are encrypted and decrypted on the client side, and the company says it does not store conversation history on its servers.

A paid subscription adds full end-to-end encryption. Voorhees says plainly that he views constant surveillance of what people type into chatbots as a real threat, and Proudman adds that all it takes is one data breach, one rogue employee or one subpoena for a user's entire query history to stop being private.

The Numbers That Won Over Investors

Venice AI reports 3.5 million registered users, more than 850,000 unique monthly site visitors and 1.3 trillion tokens processed every month. The company turned profitable as early as the first quarter of 2026, and its annualized revenue now exceeds $70 million. Only about 8 percent of users pay in cryptocurrency, with the rest relying on standard subscriptions and paid API access.

The business model also rests on the VVV token, launched in January, which can be staked to earn a daily allowance of free queries in the form of a DIEM token. The approach draws mixed reactions from AI market analysts, since it ties a speculative crypto market to a service meant to compete with giants like OpenAI and Google.

What It Means for European Users

The growing popularity of models that don't log conversations fits into louder concerns about what major AI providers do with customer data, especially after a string of controversies over leaked prompts and hidden telemetry in coding tools. For businesses and individual users in the European Union, where data protection rules are far stricter than in the United States, a tool that claims not to store query content offers a real argument for testing alternatives to ChatGPT or Claude.

At the same time, experts point out that the absence of content filters, which Venice AI treats as a competitive advantage, carries its own risk of abuse, from generating disinformation to producing content that breaks the law. Still, the company's rising valuation shows that part of the market is willing to pay a premium for privacy at the cost of some of the safeguards offered by bigger players.

Venice AI plans to put the new capital toward building out its infrastructure and further scaling the number of models it supports. The company hasn't yet disclosed plans for a more organized push into European markets, but a growing share of users from outside the United States suggests demand for the service extends beyond the American market.

Sources: Venice AI becomes a unicorn with $65M Series A as its privacy-first AI platform takes off (techcrunch.com), Venice raises $65M at $1B valuation for private, uncensored AI (siliconangle.com).