AI21 cuts more than 60% of its workforce in major strategic overhaul
The Israeli AI company will focus exclusively on AI agent optimization technology built around Maestro after Nebius acquisition talks collapse.
AI21 Labs informed employees on Monday of a sweeping organizational restructuring that includes a strategic shift toward AI agent optimization technology, the core capability behind the company’s flagship Maestro system, and a major workforce reduction, cutting headcount from approximately 180 employees to around 70.
At the same time, negotiations over a potential acquisition of AI21 by Nebius have been terminated, with the two companies instead signing a commercial partnership agreement.
The restructuring comes as organizations worldwide grapple with the challenge of integrating and optimizing AI agents after deployment, particularly as business needs and operational environments evolve. Against this backdrop, AI21 said it has decided to focus all of its resources on agent optimization technologies built around Maestro, while discontinuing the sale of its standalone AI models.
Although the company said its language models remain a critical technological foundation for its expertise in artificial intelligence, it concluded that selling models alone was not a sufficiently sustainable revenue stream.
AI21 also announced that it has signed contracts worth tens of millions of dollars with major international customers that plan to implement the Maestro system, including Nebius, to develop and operate AI agent optimization solutions. In parallel, the company signed partnership agreements with several companies, including Wix, which will base part of their activities on the Maestro platform.
Over the past two years, AI21 has operated along two primary tracks: the development of the Jamba family of language models, designed to help organizations efficiently process large volumes of information, and the development of Maestro, which was created to address one of the central obstacles to large-scale AI adoption - deploying reliable, accurate, and cost-effective AI agents in real-world enterprise environments.
According to the company, one of the key challenges in enterprise AI implementation is balancing quality, cost, speed, and reliability. Improving the performance of AI agents requires selecting the right models, tools, execution strategies, and control mechanisms, but the range of possible configurations is too broad and complex for manual optimization.
AI21, founded in 2017 by Amnon Shashua, Professor Yoav Shoham and Ori Goshen, said Maestro addresses this challenge by predicting the cost and probability of success for different configurations and then running simulations to identify the most effective combination of models and tools. The company describes the system as transforming AI agent optimization from a manual trial-and-error process into an automated, data-driven engineering discipline.
In a statement, the company said: “Developments in the field of AI have forced us to reexamine the company’s operations from end to end. It is with great sadness that we say goodbye to a group of outstanding employees who contributed significantly to the company’s key milestones. We are committed to supporting them through this transition with sensitivity and responsibility, and to doing everything in our power to help them move to the next stage of their careers.
“This move, along with our focus on AI agent optimization, a critical challenge for organizations around the world, will position the company for an accelerated growth trajectory.”
