AI startup Runaway has received a $100 million fundraising investment from Google owner Alphabet—in another attempt to take the lead in the artificial intelligence (AI) marketplace.
Key Details
- Runaway is the creator of AI-generated video software that is able to transform videos and images with text, which was famously used to assist with the movie Everything Everywhere All At Once.
- Google’s deal with Runaway not only gives the company a large interest in the startup but is part of a larger deal with the company.
- Google signed a $75 million contract on April 28 that allows it to access Runaway’s AI cloud services for the next three years, going into effect on August 30, Business Insider reports.
- Following successful Round C and D investment rounds, Runaway is now valued at $1.5 billion, thanks to Google.
Why It’s Important
The launch of ChatGPT on November 30, 2022, launched a revolution in digital technology, sparking an arms race between major tech companies like Microsoft, Google, Amazon, Apple, and Baidu to be the first to the market with profitable and practical AI-based solutions. One area of competition in the race has been the push for AI in cloud computing, which was a motivating factor behind Google’s investment in Runaway.
Tech leaders are rushing to gain an edge in the market, believing that AI will drive the cloud services market. Google invested in AI research company Antrophic last year, while Microsoft split its investment in OpenAI between itself and its Azure cloud services business. Amazon Web Services has also shown interest in Runaway, which may find itself upstaged by Google’s large investment in the startup, Business Insider reports.
“The cloud provider has begun offering AI startups a combination of cash and Google Cloud credits in exchange for equity. The company is not alone in this practice. Microsoft has invested billions into OpenAI, becoming its cloud provider (although Microsoft has been forced to find another cloud company to help it manage the workload),” says Data Center Dynamics contributor Sebastian Moss.
