AI voice recognition startup Deepgram lays off another 20% amid difficult financing conditions due to high Intrerest Rate.

The AI startup Deepgram recently announced that it will lay off about 20 employees, accounting for 20% of its total workforce. This is the company's second round of layoffs this year. The CEO stated that the layoffs are mainly due to the high Intrerest Rate environment leading to reduced funding for startups.

Deepgram was founded in 2015 and has received support from several well-known investment institutions. Currently, the company is competing with open-source speech recognition software and products from some large technology companies.

In the layoff email to employees, Deepgram executives mentioned the challenging funding environment for startups, macroeconomic challenges, and the company's performance over the past year. The laid-off employees included data scientists, researchers, and engineers.

This round of layoffs reflects the considerable pressure that AI startups are facing in this rapidly changing era. The CEO stated in a statement that due to the Federal Reserve's indication that high Intrerest Rates will persist for a longer time, the company must adopt a conservative strategy to control cost growth and focus on efficiency.

Despite the fact that the company just experienced its "best quarter" since its inception, the CEO refused to disclose specific revenue. Last fall, Deepgram announced it raised $47 million, bringing the company's total funding to $86 million and a valuation of $267 million.

In the past year, although many private software startups have been laying off employees, AI has remained a highlight in startup funding. However, as market competition intensifies, some previously high-performing AI startups are beginning to face challenges.

Deepgram's dilemma also reflects the potential impact of open-source software on proprietary AI. This is one of the hot topics in the industry, involving massive funding. Although open-source large language models are currently not as powerful as proprietary models, the gap is narrowing.

Speech recognition software has been commercialized for decades and promoted through various voice assistants. Deepgram offers speech recognition services to enterprise clients, claiming that its solutions are more accurate and faster than existing options.

However, as large tech companies improve their voice-to-text generation services and other startups launch similar products, corporate clients have begun to cut their software spending budgets, making it difficult for software providers to secure new business.

Despite the challenges, Deepgram's CEO firmly believes that the company can handle the competition due to its higher quality and more accurate products. He also believes that the launch of open-source speech recognition software will help the entire industry understand the potential of AI speech recognition software.