FOV Ventures has made an investment in System 2 AI

We’re proud to lead their recent funding round, alongside strong backing from Westcott Investment Group and value-add angels.

The team behind System 2 – Harri Valpola, Alexander Ilin, and Mathias Berglund – have been quietly pursuing this vision for decades. At Zen Robotics, Harri created systems that could understand physical objects the way humans do – grasping the reality of three-dimensional space. At Curious AI, the team developed algorithms that learn the way human minds do, and after selling the company and working for 3 years at Apple, continued to prove these approaches could work at scale.

They understand what we at FOV Ventures get out of bed for in the morning – the next era of computing should seamlessly integrate into the world around us. Intelligence that thinks, learns, and interacts the way humans do. Technology that is ultimately more human.

System2AI is a No Brainer Investment

Let’s be absolutely clear about the scale of what we’re looking at: A $50 trillion global knowledge economy where every industry becomes a potential market.

For investors, this is the kind of opportunity that comes along once in a generation…

– A massive addressable market at the cusp of transformation.

– A technology that creates compounding advantages.

– And most importantly, an early investment in a team with a proven track record of turning breakthrough research into scalable solutions.

At FOV Ventures, we’re particularly excited about how this technology could transcend traditional interfaces. Their architecture supports multimodal learning, enabling AI colleagues that could manifest as photorealistic avatars in virtual meetings or power new kinds of hardware interfaces.

This is an exciting chance to back some of the finest minds in AI as they build the foundation for the next era of human-machine collaboration, at exactly the right moment.

From Tools to Teammates

To understand what System2AI is building, we need to trace the recent evolution of AI – humanity’s quest to extend the reach of mind beyond its biological constraints.

When UiPath went public in 2021 with a $29 billion valuation, it promised a future where enterprise automation, powered by software robots, would free humans from repetitive tasks and democratise efficiency for businesses of all sizes.

The reality was very effective, but maybe not as revolutionary. RPA (robotic process automation) is capable of automating simple tasks like data entry but can be fragile, breaking with minor changes in web interfaces or document formats.

Then came the language models. Suddenly, AI could understand context, process unstructured data, and make decisions. GPT-4 could write code and showed how AI could follow complex guidelines while maintaining flexibility. But even these systems remained reactive.

Now, as we enter ‘The Third Wave’, System2AI is pursuing a vision that transcends mere tool-building… true digital co-workers.

Most AI companies rely on static LLMs and retrieval-augmented generation (RAG), requiring ever-expanding prompts to incorporate knowledge about tasks – like a person with anterograde amnesia constantly referring to an expanding set of sticky notes.

System2’s novel context distillation training procedure changes this entirely. Through an iterative process, their AI collects new experiences, receives corrective feedback from humans in the form of hints, and integrates this feedback directly into its weights. This allows the system to internalise knowledge not just accumulate more instructions.

Their implementation, built on Llama-3, has already outperformed both GPT-4 and DeepSeek-V3 on complex tasks requiring sequenced information retrieval, tool use, and reasoning.

The result is AI that evolves like a human colleague – starting as a capable apprentice and growing into a genuine collaborator. Each deployment makes the entire system smarter, as AI agents share non-sensitive learnings across the network, creating a compounding advantage that becomes harder to replicate over time.

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Additional information:
Petri Rajahalme

www.fov.ventures