The internet giant Google LLC would have been the party responsible for a recent $100 million investment into the text-to-video AI startup Runway according to sources that spoke to The Information earlier today.
Reports about this latest funding round emerged back in early May and were brought up initially by Business Insider. Even though no official confirmation has been given by the company, The Information’s report further strengthens the view that the funding round already occurred.
According to the sources cited by the media outlet, Runway was valued at $1.5 billion. This figure is three times higher than the previous valuation the firm was granted in its December 2022 Series C funding round when it received $50 million from existing investors including Amplify Partners, Lux Capital, Coatue, and Compound.
A portion of the funding – allegedly $75 million – will be granted to Runway in the form of cloud credits that can be used to tap into the Google Cloud infrastructure over the next three years to perform the required computations for Runway’s AI model to function.
Runway Signs Deals with Both Google Cloud and AWS
The deal would have been closed less than two months after Runway signed a partnership with AWS – Amazon’s cloud service – where the company affirmed that it has picked the latter as its “preferred cloud provider to scale our high performance computing cluster and leverage their research infrastructure”.
It is unclear if the partnership with Amazon (AMZN) remains unchanged or if Google will be, from now on, the go-to cloud provider for Runway.
“AWS was instrumental in the development and training of this groundbreaking video generation model, and we look forward to continuing to pioneer what’s possible with Generative AI together”, Runway’s leadership commented back in March when the partnership was announced.
These types of deals are becoming the standard in the up-and-coming AI industry as cloud providers are looking to get a piece of the pie by offering exclusive deals to companies that develop these technologies and solutions to ensure that their platforms are the go-to infrastructure for the organizations that plan to develop applications by leveraging on their large language models (LLMs).
In addition to Runway, Alphabet (GOOG), the parent company of Google LLC, has also invested hundreds of millions into one of the toughest competitors of OpenAI – Anthropic. The total investment into the latter venture reportedly ascends to $300 million and includes a 10% stake in the firm along with cloud credits.
Despite their relevance, none of these deals come any closer to the mammoth-sized investment of Microsoft (MSFT) into OpenAI, which started at $1 billion back in 2019 and grew to a total amount of $13 billion being poured into the startup as of this year.
Microsoft’s stake in the venture would currently stand at around 49% of its equity and includes a provision that the Redmond-based tech company receives three-quarters of OpenAI’s profits until the investment is fully repaid.
More About Runway and Its Ground-Breaking Text-to-Video AI-Powered Software
Runway was founded in 2018 by Cristobal Valenzuela, a former researcher at New York University, and two other tech professionals. Its solutions have already been used by prominent companies including New Balance, CBS, Ogilvy, and Vayner Media.
With its latest AI model, Gen 2, filmmakers and editors can both use the AI-powered software created by Runway to create productions from scratch by using text prompts, images, or existing footage as a starting point that can be used by the AI model to create additional content.
Runway’s basic package is free and gives creators 125 credits to produce 8 seconds of footage or approximately 25 images. Meanwhile, the Standard and Pro packages cost $12 and $28 per month and allow for multiple users, hundreds of credits per month, and the availability to buy as many credits as needed to use Runway’s video and image generation AI-powered technology.
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