AI is top of mind for stock investors these days. That means even companies outside tech are beefing up their AI credentials ahead of new listings. In one such example, Barrick Gold’s North American unit has agreed to a five-year partnership with Avathon, a startup that develops AI-powered software to help industrial companies predict when expensive equipment will fail and monitors mine and factories sites for safety risks, Avathon CEO Pervinder Johar told me. Barrick is planning to float a minority stake in its North American unit, which produces the majority of its gold. The company has targeted year-end for the listing.
AI is top of mind for stock investors these days. That means even companies outside tech are beefing up their AI credentials ahead of new listings.
In one such example, Barrick Gold’s North American unit has agreed to a five-year partnership with Avathon, a startup that develops AI-powered software to help industrial companies predict when expensive equipment will fail and monitors mine and factories sites for safety risks, Avathon CEO Pervinder Johar told me.
Barrick is planning to float a minority stake in its North American unit, which produces the majority of its gold. The company has targeted year-end for the listing.
The Barrick agreement is a windfall for 14-year-old Avathon. The miner will generate between $10 million to $20 million a year in salesfor Avathon—about 10% of the Pleasanton, Calif.-based startup’s expectedrevenue next year, according to a person with direct knowledge of the discussions. Avathon’s annual recurring revenue recently rose to more than $50 million from about $15 million last year, the person said.
In three years, Barrick’s North American unit could become Avathon’s second-largest customer, behind Aramco Digital, the tech arm of Saudi oil giant Aramco. Other large Avathon customers include Boeing, which owns 9% of the company, Airbus and the Department of Defense.
Helped by these sales gains, Avathon is preparing to raise more than $100 million by the end of the year, the person with direct knowledge said. The startup was valued at $1.4 billion in January 2022.
“This partnership is the tangible proof of physical AI moving beyond initial industry announcements to practical applications in extraction, energy and raw materials,” Johar said.
Avathon’s software runs on about 200 AI models that help it map a company’s operations, monitoring what's happening through cameras and sensors and deciding how to handle changes.Barrick will pay a base fee to use Avathon’s platform, plus fees tied to the results it gets.
Avathon’s software will scan footage from Barrick’s mine cameras to flag safety violations as they happen, and its AI agents will help Barrick buy supplies and negotiate supplier contracts, Johar said. And it will analyze Barrick's equipment to predict failures and recommend how to repair machines to keep them running longer.
Avathon and Barrick started working together in December, and the software has been running at some U.S. sites, including the giant Nevada Gold Mines complex, since the second quarter. The rollout there is expected to be completed over the next couple of quarters. The next site will be in the Dominican Republic,Johar said.
The Barrick deal follows Avathon's three-year partnership with Aramco Digital that was announced earlier this month. Aramco Digital plans to use Avathon’s software to make the towns Aramco built for its oil workers run more efficiently, with electricity meters and billing systems that run automatically.
In addition, Aramco chose Avathon because it believes it will speed up its internal system tracking access and approvals, as well as supply chain logistics, equipment performance monitoring and the safety and compliance checks, said Raj Rao, chief growth officer at Aramco Digital.
Avathon’s deals add to a recent wave of AI sales to industrial customers. Earlier this month, equipment maker Caterpillar and robotics startup FieldAI said they would bring autonomous machines to mining and construction sites. In May, robotics startup Humanoid said it would place humanoid robots at factories run by German industrial supplier Schaeffler. And in January, Hyundai and Boston Dynamics unveiled a production version of the Atlas humanoid robot, which Hyundai plans to put in its plants by 2028.
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