11/21/2020, 6:25 p.m. No time right now?
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The New York AI startup Augustus Intelligence, known in this country primarily through the lobbying work of CDU MP Philipp Amthor, has to save and is firing almost every second employee.
At first, Augustus Intelligence seemed to be lacking for nothing – least of all money. After all, the startup, which claims to offer AI solutions, was able to secure many prominent investors and supporters. Millions have been captured this way. Augustus was not dependent on venture capital companies. This is the result of a list of 40 investors dated June 8, 2020, which is available to the Handelsblatt.
Particularly peculiar: Not only are there no venture capital funds, but also no investors with expertise in artificial intelligence (AI) on the list of donors.
Augustus Intelligence has to save
The Handelsblatt has now learned from an investor report by the company that Augustus had to “significantly reduce its workforce and refocus”. The reason for this should be financial difficulties. The company is apparently having a hard time generating money from real business in addition to investor money.
According to Handelsblatt, the company has raised a total of 34.5 million US dollars, but still has no strategy or product to show. Now Augustus has reduced his workforce from 94 employees in the spring to 34 today.
Illustrious group of investors with good connections to German government circles
In this country, the startup became known in particular through the so-called Amthor affair. This consisted of the fact that the CDU MP Philipp Amthor had done lobbying work for the company and is said to have personally benefited from it. Amthor later regretted the fact that his activities became known as a mistake and drew political consequences by renouncing the planned candidacy for CDU state chairman in Mecklenburg-Western Pomerania.
Amthor, however, was not the only one who had given the startup access to the highest levels of government in recent years. This seems to have been aided mainly by the fact that it was well-known Germans who founded the company in the USA. One of the donors is the former Defense Minister Karl-Theodor zu Guttenberg (CSU), who is said to have invested 1.7 million dollars in the company and even advertised it to Chancellor Angela Merkel (CDU).
According to Handelsblatt, Prince Stefan von und zu Liechtenstein, who is also chairman of the advisory board and is said to have contributed around five million dollars through his family holding company, the private bank heir August François von Finck and members of the Swarovski family are among the other donors. Ex-Bild editor-in-chief Kai Diekmann is also counted among the donors with a relatively small investment of around 100,000 dollars.
Amthor could even have succeeded in using the KRC holdings to win an investor from his home constituency in Mecklenburg-Western Pomerania for an investment of around 1.7 million dollars. However, this acquisition success has not been confirmed.
Sales only through the company taken over
Despite these significant investments, Augustus Intelligence has not yet succeeded in bringing a product to market. According to Handelsblatt information, the company currently generates sales almost exclusively through sales of a product from its subsidiary Moblty, which it took over a year ago.
Moblty makes smart screens for retail, but it’s not profitable. In addition, it will probably not be possible to win additional customers for the solutions. Now Augustus allegedly wants to raise funds through another round of investors.
Doubts about technical competence at Augustus Intelligence are increasing
At the same time, doubts are growing that Augustus Intelligence even has the expertise that is needed to be able to develop AI solutions. In March 2020, former employees sued the company and accused it of business practices that were “permeated with fraud, illegality and corruption”. The mirror had reported.
One of the co-founders of the company is Frankfurt-born Pascal Weinberger, whom business magazine Forbes calls an AI child prodigy. The 23-year-old is an expert in theoretical neuroscience and machine learning. In Barcelona, he is said to have already headed AI research and development for the telecommunications group Telefónica.
At the age of 15, he is said to have attended correspondence courses in programming at Boston MIT (Massachusetts Institute of Technology), the world’s leading technology research center. Apparently he doesn’t have a degree.
Because allegedly he dropped out of his bachelor’s degree to work for Google. After doubts arose about his work for Google, Weinberger had told the Frankfurter Allgemeine Zeitung (FAZ) that he had not worked directly for Google, but through an external service provider and, unfortunately, could no longer say anything about it due to existing confidentiality obligations.
That sounds no less vague than the company mission on the company website. There it says: “We develop and deliver secure artificial intelligence solutions and offer our customers the opportunity to receive neutral, trustworthy and scalable data-driven results.”