Synthesia, an AI-driven video generation platform, has informed CNBC exclusively that it has obtained $90 million from investors, valuing the firm at $1 billion. The financing was headed by VC firm Accel and was backed by American chip manufacturer Nvidia. The money will be employed by Synthesia to finance AI research, furthering partnerships with leading educational institutions such as Munich's TUM and UCL in London.
Synthesia, a digital media platform that enables users to create AI-generated videos, has secured $90 million in funding — featuring American chip company Nvidia among the investors. The London firm garnered the funds in a round led by early Facebook, Slack and Spotify investor Accel, with Nvidia coming in as a strategic investor. Kleiner Perkins, GV, FirstMark Capital and MMC additionally participated.
Founded in 2017 by Victor Riparbelli, Matthias Niessner, Steffen Tjerrild and Lourdes Agapito, the platform offers people the chance to create avatars to make corporate presentations, educational videos and messages in over 120 languages. Its intent is to replace cumbersome processes in professional video production, such as using actors and cameras, with AI generated avatars. The avatars are modeled on real people and sound like humans.
Philippe Botteri of Accel, the lead investor in this Series C, said to CNBC, "Productivity can be improved because you are reducing the cost of producing the video to that of making a PowerPoint." Botteri also attributed the increased popularity of video to consumer platforms, such as YouTube, Netflix and TikTok.
Synthesia is similar to OpenAI's ChatGPT, yet the firm claims to have been constructing its own proprietary generative AI for some time. The technology may have only recently been brought to public attention, nevertheless, generative AI itself is not an emerging concept.
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Synthesia has sold to enterprise clients including Tiffany's, IHG and Moody's Analytics, though the company has not disclosed any of its sales or revenue metrics. However they have affirmed that "consistent triple digit growth" has been achieved, along with the production of 12 million videos on their platform. Synthesia has further revealed that the number of users has increased 456% year on year. Investment into technology which can enable Synthesia avatars to carry out more tasks is the course of action for the company's future, as told to CNBC by certain representative, Riparbelli. The company is looking to target product marketing, customer support, customer success, all tasks which involve a lot of text that needs to be converted into video.
Riparbelli remarked that as they transition to the next phase of Synthesia advancements, the primary focus will be on making the avatars more interactive and capable of doing more. He went on to note that Nvidia is not merely a semiconductor manufacturer, but contains a plethora of trained engineers, scholars, and scientists who develop analysis and studies on the subject. He concluded his remarks by emphasizing that Nvidia has extraordinary research groups that provide insight on the best way to nurture large models effectively.
Business Insider previously reported that Synthesia was in discussions with investors to secure up to $75 million of capital at a valuation of around $1 billion. It was unclear at the time if Nvidia was involved and the total amount of funds raised was not mentioned. As companies battle inflation and prepare for the possibility of an impending recession, Synthesia and other firms that offer AI or enterprise software to streamline business operations have been receiving increased attention from investors. This was most evident last week, when Pigment secured $88 million from financiers such as Iconiq Growth, Felix Capital, Meritech IVP and FirstMark, in part to bolster investments in AI.
The European tech market has been disheartening as of late, with funding and valuations decreasing. As a result, investors have pursued value sectors like financials, industrials, energy and consumer staples to sustain their incomes.A recent report from Atomico revealed that tech startup funding is projected to drop to $51 billion in 2023, a dip of 39% from the $83 billion seen in 2022.Interestingly, generative AI has demonstrated surprising resilience in these times, securing a 35% share of AI and machine learning investments in 2023 — a substantial rise from the 5% share it had the year before.
There are worries that the utilization of AI video tools as sophisticated as Synthesia could result in deepfakes, videos that take a person's identity and alter it so that it appears they are saying or doing something that they are not. Additionally, tech visionaries and scholars alike are calling for a global halt on AI progress beyond systems like OpenAI's GPT-4, due to apprehensions that the technology is developing to a point that could represent a danger to humankind. Synthesia first gained notoriety in 2019 with a deepfake video which featured an electronic model of famous football player David Beckham speaking about a venture to terminate malaria in nine languages. While this was done with Beckham's permission and for a beneficial cause, the wider use of deepfake technology has increased worries about the likelihood of deception.
Synthesia outlines that it is cognizant of the ethical implications of its software development. This is demonstrated by its acquisition of consent from the people it features as avatars as well as its reliance on a combination of human and artificial intelligence to monitor offensive content. Furthermore, the company is compliant with Responsible Practices for Synthetic Media, a voluntary industrywide standard for the construction, production and distribution of synthetic media.
In an interview with CNBC, Synthesia CEO Riparbelli acknowledged the need to consider long-term risks, but pressed for a focus on the current implications of synthetic media technology. "These technologies are already powerful," Riparbelli noted, "How do we deal with hallucinations? How do we deal with all of the problems that arise? There's definitely pitfalls. But there's also just so much opportunity in it, I think, leveling the playing field and enabling people to do much more with less."
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