As companies chase the power of OpenAI's ChatGPT language product, merger and acquisition deals for AI businesses are rising again, making a Minneapolis company's messaging analysis software ultra valuable in a ballooning industry.

Pluralytics, a language science business formed in 2020 by former Public Radio International executives Alisa Miller and Rick Byrne and technologist Morteza Nia, built its AI to determine which words, images and phrases best convey a brand's message to various groups of people.

Soon after launching, the startup landed several big-name clients, including Twin Cities-based hair salon franchiser Great Clips, Richfield-based Best Buy Co. and Nebraska-based Speedway Motors.

This week, the company was acquired by Dallas-based digital marketing agency Aletheia Marketing & Media Inc. to grow its suite of marketing services. Terms of the deal were not disclosed.

Combining Pluralytics' AI with Aletheia's marketing know-how could help clients see an increase in campaign engagement of up to 30%, the companies stated.

"In today's increasingly intricate marketing landscape, harnessing the power of Pluralytics has afforded Aletheia unparalleled comprehension of audience values and motivations," said Chris Schembri, founder and CEO of Aletheia. "This partnership creates a comprehensive, end to end solution for marketers to achieve impactful results."

Minneapolis AI startup Pluralytics developed a large language model that determines which words, images and phrases are best for companies when trying to appeal to certain groups of people.
Minneapolis AI startup Pluralytics developed a large language model that determines which words, images and phrases are best for companies when trying to appeal to certain groups of people.

Pluralyitcs was built using $5.5 million from mostly Texas-based investment funds. The company has been a beta partner of San Francisco-based OpenAI since 2021, predating the company's well-known ChatGPT, and incorporated OpenAI's GPT3 large language model into its own software. The relationship helped Pluralytics' leaders better grasp how to use AI.

"We were interested in using the system to understand tone and we were one of the first to do that in terms of tone of language," said Miller, the CEO at Pluralytics who will transition to chief AI officer and board member at Aletheia. Byrne will become chief marketing officer and Nia chief technology officer.

Pluralytics experienced steady revenue growth between 2021 and 2024, said Miller, who declined to disclose financial details. Aletheia will retrain Pluralytics' 10 full-time employees, giving the combined company more than 50 on its payroll and about 55 companies as clients.

"We were very intrigued with Aletheia," Miller said. "They had made a commitment in an area that was extremely complimentary to Pluralytics because we could really deliver some audience understanding and very deep content intelligence around language and imagery."

Pluralytics is the second AI company in the Twin Cities to be acquired this month. Outsell, which uses AI to create customer messaging for auto dealers, was bought in a deal valued at $100 million.

The business opportunity for marketing AI focused on messaging analysis and optimization is at least $4 billion this year, Miller said. The overall AI marketing industry is expected to reach $80 billion within the decade, she said.

In the U.S., mergers and acquisitions activity for AI and machine learning companies grew from $32.3 billion in 2020 to $70.3 billion in 2021, according to investment research firm PitchBook. It dropped to $30 billion and $28.9 billion in 2022 and 2023, respectively, but has risen significantly through the first six months of 2024, reaching $38.5 billion so far.