Paloma AI Secures 10 Million USD to Enhance Customer Service Chatbots
Paloma AI has raised 10 million USD to develop advanced AI chatbots that enhance customer service by being more reliable and emotionally aware, catering to brands' unique identities and needs.
A trio of artificial intelligence engineers with prior experience at Google LLC, Meta Platforms Inc., and Samsung Electronics Co. Ltd. have successfully raised 10 million USD for their new startup, Paloma AI, officially known as Proactive AI Lab Inc. Their goal is to create AI-powered customer service chatbots that are more reliable and emotionally attuned.
The funding round was led by UpHonest Capital with contributions from Fusion Fund, NEO Investment Partners, and angel investors like Maynard Webb.
This investment comes as the company launches its sales models, which are already in use by notable clients, including Wyze Labs Inc. and Mindzero Inc..
Customer service chatbots have gained popularity with the advent of large language models that drive tools like OpenAI's ChatGPT. Brands are increasingly using chatbots to alleviate the workload of customer service teams by addressing simpler inquiries before escalating complex issues to human agents. Furthermore, chatbots are also assisting consumers in discovering new products and services, at times even replacing traditional search engines.
Despite the excitement surrounding AI chatbots, there are challenges in their adoption. Some users have found inventive methods to mislead chatbots, causing them to make inappropriate or controversial remarks, while there have been instances of chatbots mistakenly recommending competitor products.
To counter these issues, Paloma AI believes it can make a significant impact. The startup is collaborating with OpenAI to leverage its large language models while integrating its proprietary models as a supervisory layer. This setup aims to keep chatbots focused on relevant topics and familiar with brand identity.
Paloma AI asserts that its technology helps brands to craft tailored AI sales agents capable of upselling products and offering personalized recommendations to consumers. The company collaborates with brands to incorporate proprietary data such as employee training manuals, FAQs, product inventories, and marketing materials for finer model tuning.
Leading Paloma AI is CEO Maria Zhang, a former vice president of engineering at Google and a vice president at Meta for AI products. Zhang expressed to Bloomberg that a unique advantage of their chatbots is their ability to promote user engagement, encouraging customers to ask questions they might hesitate to pose to human agents.
“Building relationships with customers requires a precise mix of human skills that even the best salespeople train for years to achieve,” Zhang stated. “We captured that skill set and turned it into models and actions our AI agents can consistently perform.”
Alongside Zhang, the co-founders include Tim Howes, the chief technology officer, formerly leading Meta's AI infrastructure team, and Steve Liu, the chief scientist who previously held a similar role at Samsung.
