Can Contextual AI Monetize RAG as a Horizontal Infrastructure Layer in AI

Retrieval-Augmented Generation (RAG) is a method designed to improve the accuracy and relevance of AI models by providing them with curated contextual information. The concept, which was pioneered by a team at Meta, has gained significant traction in the AI community. Now, the original inventors of RAG have embarked on a new venture with Contextual AI, a startup that recently raised $80 million in Series A funding, pushing its valuation to an estimated $609 million. The question on everyone’s mind is whether RAG, which has shown immense promise in niche applications, can be monetized effectively as a horizontal infrastructure layer across industries. Can Contextual AI leverage its foundational innovation to build a sustainable, scalable business that justifies its valuation, or will t