[Exclusive] Kosla, an Early Investor in OpenAI, Explores Investment in Upstage

Korea's Leading LLM Technology, Upstage
Regarded as "Closest to the Korean Version of DeepSeek"
Driving Korea's AI Industry Alongside Chip Designer FuriosaAI
Kosla Founder Renowned as a Member of the "PayPal Mafia"

Kosla Ventures, a global leader in deep tech investments such as artificial intelligence (AI) and humanoid robots, is confirmed to be in investment negotiations with Upstage, one of Korea's top AI large language model (LLM) companies. Upstage, along with semiconductor chip design company FuriosaAI, is called the 'two pillars' leading the future of Korean AI. FuriosaAI recently attracted attention for reportedly being in acquisition talks with Meta.

According to the venture capital (VC) industry on the 20th, Kosla Ventures is currently negotiating to make a new investment in Upstage. Regarding this, an Upstage official stated, "We are reviewing various possibilities but nothing has been decided yet."

'Deep Tech Investment Compass' Kosla Ventures

Kosla Ventures is investing in cutting-edge technology startups in AI, humanoid robots, nuclear fusion, bio, and more, utilizing a fund of approximately $3 billion (4.2 trillion KRW) raised in 2023. Compared to mega VCs managing tens of trillions of won such as Sequoia Capital and DST Global, its current fund size is relatively small. However, established in 2004, Kosla Ventures is one of the most notable VCs in Silicon Valley due to its founder Vinod Kosla and a successful investment track record over the past 20 years.

Vinod Kosla, known as the 'investment guru of Silicon Valley,' is currently a member of the 'PayPal Mafia,' which wields significant influence over the Trump administration in the U.S. The PayPal Mafia refers to key executives who worked at the online payment startup PayPal from its founding in 1998 until its $1.5 billion sale to eBay in 2002. Elon Musk, CEO of Tesla, and Peter Thiel, co-founder of Palantir, are core members of the PayPal Mafia.

Kosla Ventures invested $50 million (70 billion KRW) in OpenAI, the U.S. developer of ChatGPT, when it raised funds in 2019 at a valuation of $1 billion (1.4 trillion KRW). Recently, OpenAI's valuation is estimated at $300 billion (420 trillion KRW). Kosla Ventures also has a history of early investments in numerous deep tech unicorns (unlisted startups valued at over 1 trillion KRW).

Leading Domestic AI Solutions, Upstage

While FuriosaAI is the flagship star in Korea's AI hardware sector, Upstage leads in the software field.

Founded in October 2020 by CEO Kim Seong-hoon, known as the 'father of Naver Clova AI,' with the motto "Making AI Beneficial," Upstage quickly attracted developers from global companies such as Meta, Amazon, Google, Apple, and Nvidia.

Its representative solutions include the self-developed LLM 'Solar' and 'Document AI,' which uses optical character recognition (OCR) technology to recognize scanned files of old documents and convert them into databases. These solutions are already widely used by major Korean conglomerates such as Samsung Group's financial affiliates, Hanwha Life, and POSCO.

Recently, Upstage has been recognized as a leading domestic AI company competing against U.S. players like OpenAI and Chinese players like DeepSeek.

Based on the Massive Multi-task Language Understanding (MMLU) benchmark, OpenAI's o1 scored 91.8 points, DeepSeek's R1 scored 90.9 points, and Upstage's 'Solar Pro,' officially launched at the end of last year, scored 81.4 points on the same scale. Notably, DeepSeek's R1 is a model with approximately 671 billion parameters, whereas Solar Pro achieved this performance with only about 22 billion parameters, nearly 30 times fewer, which has attracted attention. An AI industry insider commented, "If they refer to the open-source approach of DeepSeek, even more explosive advancements are possible."

"Korean AI Companies Are Quite Capable"

In the VC industry, there was a positive reaction to Meta's news of pursuing the acquisition of FuriosaAI, stating, "Regardless of the final investment success, it is encouraging that global players have taken an interest in Korean AI-related companies."

An industry insider who reported on Kosla's investment said, "The fact that Meta is pursuing FuriosaAI and Kosla Ventures is negotiating with Upstage alone indicates a high score for the global competitiveness of Korea's AI-related industry."

However, there are also critical voices regarding the reality that domestic AI companies have no choice but to turn to global investments.

An investment banking (IB) industry official said, "Unlike domestic private equity funds that can easily raise funds worth trillions of won, large domestic VCs can only create funds up to about 200 billion KRW at most, investing less than 10 to 20 billion KRW in native deep tech companies. The scale of domestic deep tech VC funds needs to grow significantly to nurture promising AI startups."

In fact, Upstage has received about 140 billion KRW in investments to date, and FuriosaAI about 170 billion KRW. This contrasts with OpenAI, which raised $1.135 billion (1.6 trillion KRW) in its early days from 2019 to 2020.