Concerns about the impact of AI chatbots on mental health, personal safety, harassment, and disinformation have forced AI developers to implement safeguards to better control how and what their AI models are allowed to respond or do.
But concerns and worries cannot undermine demand. AI holds promise, and people don’t want a faceless tech company limiting their access to that potential. And if they can maintain their privacy while using AI models at will, why not?
Venice AI, which provides access to more than 200 AI models while allowing users to maintain their privacy, is capitalizing on this demand. Just two years later, the company already has more than 850,000 unique visitors to its website and serves more than 3 million active users and an average of 1.7 million API calls per day.
The startup hosts “uncensored” open-source models in its own data centers and routes queries to closed-source models like those from OpenAI or Anthropic. All user input is encrypted and unencrypted client-side and routed through an external proxy before being processed and returned, without any data being stored on Venice’s own systems. It also offers end-to-end encryption on some models, although you’ll need to pay for a subscription to use this feature.
The company is already profitable with annual sales of over $70 million, said CEO Erik Voorhees (pictured top center) in an exclusive interview with TechCrunch.
Understandably, investors flocked to capitalize on this momentum. Venice AI announced Wednesday that it has raised $65 million in Series A funding at a valuation of $1 billion, its first outside fundraising. The round was led by crypto-focused venture firm Dragonfly, with participation from Coinbase Ventures, North Island Ventures and others.
The overlap between Voorhees, Venice’s privacy focus, and his new crypto investors are hard to miss, especially given the CEO’s background and previous work. Voorhees, an early proponent of Bitcoin, has founded a number of crypto companies, including Bitcoin gambling site Satoshi Dice and cryptocurrency exchange ShapeShift, and has long been an advocate for protecting user privacy.
When a Wall Street Journal investigation accused ShapeShift, which initially did not require its users to identify themselves, of processing millions in suspicious funds, Voorhees reportedly said, “I don’t think people’s identities should be recorded to catch an opportunistic criminal.”
He expressed similar sentiments when asked how Venice AI feels about offering access to AI models in light of recent cases of AI psychosis and the resulting harm, saying his team views their service as a “neutral tool or platform.”
“This is the same principle as Bitcoin, where Bitcoin, as a neutral protocol, works the same for all people,” he said. “I think it’s actually quite dangerous from a security perspective that the world is entering this next phase and everyone is under constant surveillance. To me that’s actually much more dangerous than a single person asking a controversial question or something that could be viewed as bad.”
There is also a significant focus on giving users freedom of choice. Users can freely choose between AI models that can generate text, images, audio and video – all differing in their performance, quality and the level of censorship applied. The site prominently features several AI “characters” that you can customize and chat with, and the company proudly states that it offers an “uncensored” experience.
“We optimize for freedom and actually respect users as adults, which I think is rare these days,” Voorhees said.
The founder said Venice is also working on the system prompts of some open models to instruct them to respond more openly, although this will not add any restrictions to the models.
Not surprisingly, there are two crypto tokens associated with this venture. Venice launched a token called “VVV” in early January to attract users, Voorhees said, and added another called “DIEM” in August last year. Users can purchase VVV and then stake it to mint DIEM, generating $1 per day in AI credits to spend on Venice. However, Voorhees said only about 8% of the company’s users pay with crypto.
The founder attributed the company’s growth to the crypto tokens’ good performance, but said the strongest driver was moving closer to feature parity with ChatGPT. “When we launched we were very far from what ChatGPT could do, but people used us because it was private. And today we are very close to what ChatGPT can do.” […] As we have closed that gap, it has become an increasingly attractive alternative,” he said.
Looking forward, Venice AI wants to use the fresh cash to start purchasing GPUs and building its own data centers so the company can stop leasing GPUs and increase its gross margins.
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https://techcrunch.com/2026/07/01/venice-ai-becomes-a-unicorn-with-65m-series-a-as-its-privacy-first-ai-platform-takes-off/
