Former OpenAI research chief Bob McGrew’s manufacturing AI venture Arda secured $230 million in financing, valuing it at $1.5 billion, the company said in a 20 October interview with CNBC. Altimeter Capital, Accel and Khosla Ventures led the round. Arda is building software to help manufacturing engineers adapt automated assembly lines to changes in product design.
Key points
- Arda raised $230 million at a $1.5 billion valuation, with Altimeter Capital, Accel and Khosla Ventures leading the round.
- McGrew says changing factory automation for a new design can take three to six months; Arda’s product is intended to help engineers build assembly lines faster.
- McGrew says Arda’s AI models have already been deployed with Anduril.
Altimeter’s case for Arda’s valuation
Altimeter’s Apoorv Agrawal led the funding round. He and McGrew previously worked together at Palantir, where McGrew spent more than a decade as a product and engineering lead. The financing gives Arda substantial capital to develop software for factory automation, a business in which its lead investor is betting on a much broader market.
Agrawal put the manufacturing industry at $16 trillion globally and $3 trillion in the United States. He said much of that production takes place overseas and sees an opportunity to bring more of it to the US. Agrawal expects Arda to capture a significant portion of that opportunity, while acknowledging the price paid in the round. “Yes, the price is steep today, but the long-term opportunity is very high,” he said.
That is the investor’s case for the valuation: a manufacturing market he considers large enough to support Arda’s plans, and software aimed at a specific constraint in automated production. Agrawal’s market figures describe manufacturing as a whole, rather than spending on the kind of software Arda is building.
McGrew targets factory design changes
McGrew describes Arda’s product as an interface and AI agent for manufacturing engineers, drawing a comparison with Claude and Cursor as tools for programmers. Its intended use is the work of altering production when a design changes. He said a person can be trained on a revised design in a day, while changing the automation to match it can take three to six months.
Arda has built software that McGrew says allows engineers to construct assembly lines much faster. The company uses its own proprietary models alongside open-source and frontier models, according to McGrew. Its pitch rests on shortening the work needed to make automated equipment accommodate a new design, rather than on replacing the design itself.
McGrew said frequent design changes can favour production in East Asia, where large numbers of workers can be retrained quickly instead of waiting for automation to be changed. He also said automating factories could support more US manufacturing and jobs. Robotics is next on Arda’s product roadmap, he said.
McGrew’s team draws on OpenAI and Palantir
McGrew joined OpenAI in 2017 and worked on reasoning capabilities for its early models before ChatGPT launched. He remained through the dismissal and reinstatement of chief executive Sam Altman in November 2023. McGrew said he wanted to deliver OpenAI’s reasoning product before moving on.
He left OpenAI in 2024, during a period that also saw the departures of chief technology officer Mira Murati and co-founder and chief scientist Ilya Sutskever.
His co-founders bring experience from other AI and software companies. Augustus Odena helped start Adept and previously worked at Google and Meta. Alex Mark and Jakob Frick are former Palantir engineers. McGrew told CNBC that Arda’s AI models have already been deployed with Anduril.
