Nuance Labs bags $50M in funding to fix the awkwardness of AI avatars. Nuance Labs, a Seattle-based startup that's trying to make artificial intelligence models better at face-to-face conversations, said today it has closed on a $50 million early-stage funding round to make that happen. Today's Series A round was led by Lightspeed Venture Partners, which previously backed the company's seed funding round. Existing investors Accel and South Park Commons also returned, alongside new investors Nvidia Corp. and Define Ventures. Nuance is trying to build a "human foundation model" to power avatars that can engage in conversation with humans without the lag and awkwardness associated with existing chatbots. It's doing this by giving them more emotional intelligence, co-founder and Chief Executive Fangchang Ma said in an interview with Business Insider. Ma, formerly an AI researcher at Apple Inc., explained that existing voicebots and AI avatars are built in a roundabout way, with developers effectively duct-taping together various models, like voice-to-text generation model, a large language model that responds to those texts, and then a text-to-voice model that transforms those responses into audio. That's why existing chatbots tend to have delayed responses, because they have to process everything step-by-step. In the case of AI avatars, there's a fourth step, because the model also needs to animate a face to match what the avatar is saying. According to Ma, these handoffs strip away any feeling of engaging with a human, resulting in avatars that appear frozen when someone is talking to them. "If you use existing AI avatars, when they're listening, they're not reacting, or they're just doing random things," Ma said. Nuance Labs wants to change this and make AI avatars more realistic, so it has developed a model that can perceive and generate responses and reactions via one full-duplex system. The system incorporates audiovisual perception of the user's stream to understand what the person it's engaged with is doing and saying, and at the same time, streams back an audiovisual response. This allows the model to react to verbal and non-verbal cues from the human as they're speaking. Ma said Nuance's model can perceive words, gaze, gestures, tone and timing, and respond to these inputs in real time with facial and vocal expressions. It learns to do this better over time by studying how people behave during its conversations. As a result, it can demonstrate understanding in the moment, even while the user is still speaking, just as regular humans do. "We decided to build this on one system, on one model," Ma said. "There's audio/video in and audio/video out." The company has posted a demo of its model, and while it's still a work in progress, that progress appears to have come quite far: According to Ma, Nuance's models enable AI avatars to engage in conversations with humans that feel more natural and productive, with better outcomes in scenarios where expressions can help drive results. He's targeting use cases such as sales and customer service, coaching, professional training and education. So someone would be able to hop onto a video call to learn a new language, or practice an interview. Nuance has not yet launched any product as it's still tinkering with its model to make conversations feel even more fluid, but it hopes to have its first research preview ready to roll out to the public later this year. In the meantime, the funds from today's round will help to accelerate those development efforts, Ma said. Nuance will also hire more researchers. Lightspeed Venture Partners' Nnamdi Iregbulem said there's a "massive opportunity" to fix the way people interact with AI systems. "The founding team has a rare mix of technical talent and operating excellence, and they've turned that into a single model that follows you in real time," he said. "We can see this becoming a foundational layer for AI products everywhere, and this is the team to build it." Photo: Nuance Labs. A message from John Furrier, co-founder of SiliconANGLE: Support its mission to keep content open and free by engaging with theCUBE community. Join theCUBE's Alumni Trust Network, where technology leaders connect, share intelligence and create opportunities. * 15M+ viewers of theCUBE videos, powering conversations across AI, cloud, cybersecurity and more * 11.4k+ theCUBE alumni - Connect with more than 11,400 tech and business leaders shaping the future through a unique trusted-based network Are you an AWS customer? 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Command palette. 3 hours ago Seattle-based AI startup Nuance has closed a $50 million Series A funding round led by Lightspeed Venture Partners, with participation from Accel, Nvidia NVentures, South Park Commons, and Define Ventures. Founded last year by three former Apple researchers, the company is developing a next-generation conversational AI platform designed to replicate the emotional intelligence and real-time responsiveness of human interaction. Current AI assistants typically rely on cascading separate systems for speech-to-text, language processing, and text-to-speech generation, resulting in noticeable latency and a lack of nuanced nonverbal cues. Nuance founder and CEO Fangchang Ma aims to resolve these limitations by engineering a single, unified model that accepts and outputs synchronized audio and video. This architecture enables the system to monitor facial microexpressions and vocal intonations, allowing for dynamic, context-aware reactions during live dialogue. To ensure authenticity and accuracy, the company has declined to train its models on scraped web content, instead investing in proprietary data collection through direct recordings with research partners. The capital will primarily support the expansion of Nuance's eight-person research and development team, alongside efforts to secure go-to-market specialists who will finalize pricing and commercialization strategies. Despite remaining in a pre-product phase, Nuance has outlined immediate applications targeting both enterprise and consumer markets. Early use cases include AI-driven interview coaches, presentation trainers, language tutors, and scalable customer service representatives. A public research preview of the underlying model is scheduled for release later this year. The latest investment follows a $10 million seed round led by Accel last July, underscoring growing investor confidence in specialized AI systems that prioritize emotional responsiveness over basic conversational functionality. As the startup scales its operations, it positions itself at the intersection of affective computing and practical enterprise automation. This news is intelligently aggregated by AI to deliver industry updates efficiently. It does not constitute opinions or advice. Business Insider