While OpenAI pursues another goal Monster raising fundsIt's not stealing all the oxygen in the room: AI startups that are building promising foundational models can still open doors and checkbooks. Multiple sources tell us that Black Forest Laboratories — a startup that is building generative AI imaging models and came out of anonymity two months ago with $31 million in funding — is closing a new round of funding. We're told it's a $100 million round at a $1 billion valuation. The deal may not be final and could therefore still be subject to change.
Black Forest isn’t just any AI startup: The company was co-founded by the engineers who created the technology behind Stability AI. And it has a big-name customer. Elon Musk’s X.ai is using Black Forest’s Flux.1 text-to-image model to power image generation in its Grok chatbot. It’s a service that had people chatting immediately after it launched, in part because of the bold results people generated with it.
A month later, the phrase “no filters” is still relevant. We created the image on the right earlier this week.
The company is also drawing attention from investors for its founders and founding team, which includes Andreas Blattmann, Patrick Esser, Dominik Lorenz and CEO Robin Rombach, researchers who created Stability AI, considered a revolutionary platform for imaging.
“Robin Rombach is known for being an absolute expert in image dissemination models and when you have someone so smart and proven in a completely new space, it's a no-brainer that one should invest if given the chance,” one of the company's investors told TechCrunch.
It’s not yet entirely clear who is investing in the Freiburg, Germany-based startup’s latest round. One source mentioned that Lightspeed, one of the most prolific investors in AI in Europe, backing Helsing, Mistral, Stability AI, and others, might be involved. Lightspeed has not yet responded to a request for comment, and neither has Black Forest. (We’ll update the post if they do.)
The company's previous funding round of $31 million included a high-profile roster of investors led by Andreessen Horowitz and others. PitchBook Dataincluded General Catalyst and Stuttgart VC Mätch.vc, with Nvidia’s Timo Aila, Oculus co-founder Brendan Iribe, Apple AI research scientist Vladlen Koltun, entertainment mogul Michael Ovitz and Y Combinator’s Garry Tan also in the mix.
The $1 billion valuation is a big jump from the last round's post-funding valuation, which was a modest $150 million. (Asked about further funding, Andreessen Horowitz declined to comment for this article.)
Rapid fundraising in the generative AI space has become quite common in today's market: startups developing these tools need funding to buy equipment, hire talent, perhaps to close intellectual property licensing deals, and for marketing and business development to compete with larger, better-funded players. In the case of Black Forest Labs, there will soon be more technology launches. The company has I already said it's working into a next-generation text-to-video tool, with a debut date yet to be announced.
But the market has been tricky and sometimes unkind to some of the smaller AI players who have raised a lot and are now under pressure to deliver. H in Paris, a generative AI startup started by DeepMind alumni, raised $220 million in May of this year. It has already lost three of its five co-founders, reportedly for more than Operational differencesAleph Alpha, which has raised over $500 million, appears to have… pivoted to business services over building foundational models.
“Being in the headlines, being the center of attention, but not delivering on what was promised,” is how another investor who spoke to TechCrunch described the plight of companies like Aleph Alpha and H.
Naturally, Black Forest Labs will try to avoid such problems, especially since, at least for the moment, it lacks a strategic investor that could prop it up with huge amounts of cash to grow more aggressively. The same investor said: “I think they will try to take the other route, which is to stay as secretive as possible.”
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