Aleph Alpha, a German startup taking on Microsoft-backed artificial intelligence firm OpenAI, said Monday it had raised $500 million in a funding round backed by the likes of Bosch, SAP and Hewlett Packard Enterprise.

The company, which has built its own large language models, raised the fresh cash in a series B round, the company’s second major funding round. It is an unusually large sum of cash for a series B investment round.

The fundraise was backed by predominantly German firms, with enterprise IT giant SAP, Schwarz Group, the owner of Lidl, and consulting firm Christ&Company Consulting investing in the company’s new round. Park Artificial Intelligence and Burda Principal Investments also invested.

Aleph Alpha did not disclose its valuation in the latest fundraise.

Aleph Alpha will use the fresh funds to invest in research on foundation models, advanced product capabilities and commercialization of its software, the company said in a statement Monday.

“With this latest investment, we will continue to enhance our capabilities and enable our partners to be at the forefront of this technological development,” said Jonas Andrulis, CEO and founder of Aleph Alpha.

“To empower customers, Aleph Alpha will continue to expand its offerings while maintaining independence and flexibility for customers in infrastructure, cloud compatibility, on-premise support and hybrid setups.”

A big part of what Aleph Alpha is pushing for with its technology is a concept known as “data sovereignty,” the concept that data stored in a certain country is subject to that country’s laws.

In a European context, this means requiring that the data that powers these AI models is grounded in Europe — rather than in the U.S.

This concept has gained traction with high-profile European politicians and lawmakers as they seek to ensure that they aren’t at the mercy of the U.S. when it comes to data storage and processing.

Andrulis said that Aleph Alpha remains the “best option” for companies where sovereignty is viewed as a critical component.

Aleph Alpha’s models can already communicate in German, French, Spanish, Italian and English. Its training data includes the vast repository of multilingual public documents published by the European Parliament.

The new fundraise highlights the frenzied activity happening in the venture capital around AI.

Investors are racing to back companies building the foundations of radically advanced AI models known as generative AI, that can answer queries on just about anything in a more humanlike manner.

OpenAI, which is backed by Microosoft, raised a whopping $10 billion, while Inflection, an AI startup co-founded by the founders of DeepMind and LinkedIn, pulled in $1.3 billion.

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