Prof. Amnon Shashua’s AI company AI21 Labs has announced a major organizational change, in which 110 out of 180 employees will be laid off. The deep cuts will leave mainly research and product development staff who will continue to develop the Maestro AI agent management system and improve the algorithms of its language models. This is about 60% of employees, and a big blow to the company, which has been in talks with several companies to be acquired, the most recent of which is AI cloud company Nebius.
AI21 Labs said, "Developments in the AI field have forced us to reexamine the company's activities from end to end. It is with great sadness that we say goodbye to a group of excellent employees who have contributed significantly to the company's key milestones. We are committed to supporting them during this period with sensitivity and responsibility, and to doing everything in our power to help them move to the next stage. This move and our focus on AI agent optimization, a key problem for organizations around the world, will allow the company to embark on an accelerated growth path."
In addition to the layoffs, the company reports that it has signed agreements totaling tens of millions of dollars to implement the Maestro AI agent management system, including with Nebius, and has also signed partnership agreements with companies such as Israel’s Wix, which will base their own operations on the system.
The company said, "Given the challenges faced by most organizations worldwide in implementing and optimizing AI agents for the organization's needs after their construction phase, in line with the organizational and business developments of each company, AI21 has decided to focus all of its resources in this area and continue developing optimization solutions for agents based on the Maestro system. The company will discontinue sale of models themselves, which are a major infrastructure for its expertise in the AI world but are not a sufficient source of income on their own."
AI21 has struggled to sell its language models, the most recent of which is Jamba, but has had relative success selling a new product launched last year - its agent management system. "One of the key issues in implementing AI in organizations that AI21 has identified is the balance between quality, cost and response time while maintaining reliability," AI21 said. "Improving the performance of a research agent requires a smart selection of models, different types of tools, and running strategies and control methods. But the space of possibilities is vast and too complex for manual experimentation. To bridge this gap, AI21's Maestro learns to predict the cost and probability of success of each possible configuration and then runs simulations to find the most optimal combination of models and tools, to obtain the most accurate results, while maintaining operational efficiency. The main idea is to transform agent optimization from a manual trial-and-error process to an automated, dynamic, and data-driven engineering process.
In 2023, AI21 received a valuation of $ 1.4 billion, and according to estimates, the company's investors, including Pitango, Intel Capital, B2 Ventures, Cotto, Google and Nvidia seek a premium on the investment and hope to sell the company for several billion dollars.
Published by Globes, Israel business news - en.globes.co.il - on May 18, 2026.
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