Three former engineering leaders from Alphabet Inc.’s Google, Meta Platforms Inc. and Samsung Electronics Co. have raised $10 million for a new startup focused on making artificial intelligence-powered customer sales agents more emotionally attuned.
The Palo Alto, California-based company, called Palona AI, is launching on Thursday and announcing the debut of its sales models, which target consumer-facing businesses. Customers include home security camera maker Wyze Labs and wellness studio Mindzero. It also received initial capital from a “friends and family” round with investors such as UpHonest Capital, Fusion Fund, the startup accelerator Neo, and Maynard Webb, a Visa Inc. and Salesforce Inc. board member.
AI-powered tools in customer service
The rise of large language models like OpenAI’s GPT have prompted consumer brands to incorporate chatbots and other AI-powered tools into their customer service processes, delegating simpler question-and-answer tasks to machines before a request is escalated to a human. It’s also become a new way for users to discover products, with ChatGPT replacing Google as some people’s default search engine.
But the rise of the technology hasn’t been without hiccups. Users have found creative ways to lead chatbots off topic or get them to offer answers that run counter to a brand’s interests, such as recommending a competitor’s product.
Palona AI’s pitch
Palona AI’s claims to help brands prevent these issues. Through a partnership with OpenAI to use its large language model, the startup is developing a separate model on top of it to act as a supervisor to chatbots that can keep conversations on track and make them come across as more polite and more aware of a brand’s identity, said Chief Technology Officer Tim Howes.
“This technology, in my personal opinion, currently hasn’t been democratized,” said co-founder and Chief Executive Officer Maria Zhang. Brands are being “disintermediated” by aggregator platforms like Amazon and DoorDash, she added.
Palona AI says it can help clients cultivate direct customer relationships by developing AI sales agents that are capable of upselling and providing personalized recommendations. The company works with consumer brands to incorporate their employee training manuals, FAQs, product inventory and marketing materials as training data for its models before they’re deployed to interact with customers. As a result, Zhang said users engage with its AI assistant more, suggesting they aren’t afraid to ask questions they otherwise might be embarrassed to ask a human salesperson.
“If you type ‘hmmm,’ you can break most of the chatbots, but our AI would say, ‘I sense hesitation. How can I help you with this?’” Zhang said.
Zhang was previously a vice president of engineering at Google, a general manager for Meta’s AI for Products group, and chief technology officer for Tinder. She met Howes at Yahoo when the company bought her first startup in 2013. Howes is also a former leader of Meta’s AI infrastructure team and was CTO at Netscape and HP Software. Steve Liu, a tenured McGill professor and former chief scientist at Samsung AI Center and Tinder, is Palona AI’s chief scientist and third co-founder.
“What we saw as a big failing of those language models was, there is no question you’re not talking to a human,” Howes said. “If we can engage users in a conversation they actually like, then you can provide all kinds of value.”
