Artificial intelligence startup Cohere has delivered strong momentum in the enterprise segment, reporting approximately $240 million in annual recurring revenue (ARR) for 2025 — comfortably surpassing its internal $200 million target — according to a February 2026 investor memo obtained by CNBC.

The company achieved quarter-over-quarter revenue growth of more than 50% throughout the year, demonstrating consistent execution in a highly competitive market where larger rivals are aggressively expanding their enterprise footprints.

“Our thesis is clearly resonating in the market,” Cohere wrote in the memo. “Our sales pipeline continues to grow as global organizations across regulated sectors choose Cohere as their trusted partner for secure AI adoption at scale.”

Founded in Toronto in 2019 by former Google Brain researchers Aidan Gomez, Ivan Zhang, and Nick Frosst, Cohere has carved out a distinct niche developing large language models and software tools tailored for business use cases. The company is backed by high-profile investors, including Nvidia and Salesforce Ventures, and its valuation has grown to roughly $7 billion in recent private rounds, reflecting sustained confidence from strategic and financial backers.

Cohere’s performance comes at a pivotal moment for the generative AI industry. While consumer-facing chatbots like ChatGPT and Claude have dominated headlines, enterprise adoption is now the primary battleground. OpenAI reported in November 2025 that more than 1 million businesses worldwide were using its technology, while Anthropic disclosed in September that it serves over 300,000 businesses.

These sizable customer bases present significant scale challenges for emerging players like Cohere.

Yet Cohere has differentiated itself through a capital-efficient business model that emphasizes flexibility and security. The company primarily generates revenue from software licenses and services, allowing customers to run its models either through managed cloud services or directly on their own hardware. This approach avoids the massive infrastructure costs incurred by full-stack competitors that build and operate their own data centers, enabling Cohere to invest more aggressively in customer acquisition, product development, and research.

As a result, Cohere’s gross margins averaged around 70% in 2025, expanding by 25 basis points year-over-year.

“By scaling compute resources proportionally to customer demand, we remain insulated from the speculative excesses surrounding the broader AI market, positioning Cohere for more sustainable growth,” the company told investors.

This efficiency has been particularly attractive to regulated industries — financial services, healthcare, government, and legal — where data privacy, auditability, and on-premises deployment are non-negotiable requirements. Cohere has leaned into these sectors, offering models that can be fine-tuned and deployed in secure environments without sending sensitive data to third-party clouds. CEO Aidan Gomez has been vocal about the company’s growth ambitions.

In October 2025, he told Bloomberg that Cohere hopes to make its public market debut “soon,” suggesting investors would welcome a “pure play AI investment opportunity” focused on enterprise use cases. The strong 2025 results and clear 2026 roadmap appear to lay the groundwork for that potential IPO. For 2026, Cohere outlined plans to accelerate European expansion — a region with stringent data protection regulations that favor privacy-first AI providers — and to further develop its AI agent platform, North.

The company told investors it anticipates another year of “rapid growth,” supported by deepening enterprise penetration and continued model improvements. The results stand in contrast to the broader AI funding and valuation environment, where some high-profile startups have faced scrutiny over high burn rates and uncertain paths to profitability. Cohere’s emphasis on capital efficiency and recurring revenue from enterprise software positions it as a more measured player in a market often criticized for speculative excess.

However, OpenAI and Anthropic have continued to expand aggressively in the enterprise space, leveraging their frontier model capabilities and vast resources. Cohere must continue proving that its specialized focus on security, customization, and deployment flexibility can win and retain large accounts against bigger, better-funded rivals.

The strong 2025 performance and clear enterprise momentum suggest Cohere is executing well on its strategy of building a sustainable, high-margin AI business. As the generative AI market matures and shifts from hype to practical deployment, companies that can deliver secure, efficient, and enterprise-ready solutions are likely to garner increasing attention from both customers and public market investors. Cohere’s progress in 2025 puts it in line as a serious contender in that evolving landscape.

ByteDance’s potential $6–$7 billion sale of Moonton would mark a strategic exit from large-scale gaming as Saudi Arabia deepens its push into global interactive entertainment.

ByteDance is in advanced discussions to sell Shanghai Moonton Technology, the studio behind the global mobile hit Mobile Legends: Bang Bang, to Saudi Arabia’s Savvy Games Group in a deal valued between $6 billion and $7 billion, according to two sources with knowledge of the matter who spoke to Reuters.

One source said the transaction could be finalized as soon as this quarter. The companies have reached an initial agreement on broad terms, the second source said

A Strategic Retreat From Gaming

A sale would represent a decisive shift for ByteDance, which in recent years sought to diversify beyond its core short-video business into gaming.

ByteDance acquired Moonton in 2021 through its gaming subsidiary Nuverse in a deal that valued the studio at about $4 billion. The purchase formed part of an effort to build an international gaming portfolio capable of challenging established players in mobile and online gaming.

In 2023, however, ByteDance announced it would restructure its gaming business following a strategic review, signaling a recalibration of priorities. The company has since reduced investment in several game development projects and scaled back its broader gaming ambitions.

A sale at up to $7 billion would crystallize a substantial gain on its original acquisition, reflecting the sustained commercial performance of Mobile Legends and the premium attached to proven global IP.

The move would also allow ByteDance to reallocate capital and management focus toward its core growth drivers — including TikTok, advertising technology, and artificial intelligence initiatives — sectors that align more closely with its long-term strategy.

Founded in 2014, Moonton has grown into a major player in mobile multiplayer online battle arena (MOBA) gaming. The company says it employs more than 2,000 people and operates across Southeast Asia, Latin America, and China.

Its flagship title, Mobile Legends: Bang Bang, has recorded more than 1.5 billion installations and over 110 million monthly active users, according to the company’s website. The game consistently ranks among the top 10 most played titles in more than 80 countries.

The title’s strength lies not only in downloads but in its live-service model, which generates recurring revenue through in-game purchases, seasonal content updates, and cosmetic items. Its deep integration into Southeast Asia’s e-sports ecosystem further enhances monetization through sponsorships, media rights, and branded tournaments.

For an acquirer, the combination of scale, brand recognition, and recurring revenue streams makes Moonton an attractive strategic asset in a consolidating market.

Saudi Arabia’s Expanding Gaming Strategy

For Savvy Games Group, the acquisition would reinforce Saudi Arabia’s ambition to establish itself as a global hub for gaming and e-sports.

Savvy is owned by the Public Investment Fund and has pursued rapid expansion through acquisitions and investments. In 2023, it acquired Scopely for $4.9 billion. Earlier this year, Scopely acquired the games division of Niantic for $3.5 billion.

Adding Moonton would expand Savvy’s footprint in Asia and strengthen its position in the highly competitive mobile gaming segment. Southeast Asia represents one of the fastest-growing gaming markets globally, driven by smartphone penetration, youthful demographics, and increasing digital payment adoption.

The acquisition would also support Saudi Arabia’s broader Vision 2030 economic diversification program, which aims to reduce reliance on oil revenues by developing entertainment, media, and technology industries.

The proposed deal is seen as part of the ongoing consolidation in the global video game industry. Rising development costs, higher marketing expenditures, and intense competition for user attention have increased the strategic value of established franchises with durable engagement metrics.

In recent years, large publishers and investment groups have sought to secure high-performing IP that can generate predictable cash flows and cross-platform expansion opportunities. Mobile gaming, in particular, has proven resilient due to its lower hardware barriers and global reach.

A valuation of $6 billion to $7 billion implies confidence in Moonton’s ability to sustain user growth, expand monetization, and maintain relevance in an increasingly crowded market. It also suggests that premium mobile IP continues to command significant multiples, especially when paired with strong regional e-sports ecosystems.

The divestment discussions come amid strong financial performance at ByteDance. Reuters has reported that the company’s revenues in the first and second quarters of 2025 exceeded those of Meta Platforms, making ByteDance the world’s largest social media company by sales during those periods.

In the third quarter, ByteDance launched an employee share buyback program valuing the company at more than $330 billion, up 5.5% from its previous buyback valuation in March, according to sources.

Against that backdrop, the Moonton sale appears less about liquidity and more about strategic discipline. By exiting a capital-intensive and competitive gaming segment, ByteDance could sharpen its focus on areas where it holds structural advantages — algorithmic content distribution, advertising monetization, and AI-driven personalization.

If completed, the transaction is expected to mark two broader shifts in the global technology industry.

First, Chinese consumer internet giants are increasingly concentrating on core competencies rather than pursuing diversified expansion at any cost. Second, Gulf sovereign wealth funds are accelerating their acquisition of global entertainment and digital assets, aiming to build long-term influence in high-growth sectors.

However, the sale would close a chapter in ByteDance’s efforts to build a gaming empire, while it would represent another step by Savvy Games Group in assembling a globally competitive portfolio anchored by proven intellectual property.