WASHINGTON (dpa-AFX) - German AI startup Black Forest Labs is in talks to raise $200 million to $300 million in new funding, which could increase its valuation to roughly $4 billion. The specifics are subject to change and are not final.
Established in 2024 by a group that contributed to the development of the AI image generator Stable Diffusion, the business has rapidly become one of Europe's most promising AI firms, competing with Mistral AI of France.
Black Forest has already inked significant agreements with major U.S. tech companies, such as a partnership with Adobe on AI image-generation tools and a deal with Meta Platforms reportedly valued at over $100 million.
Vibes, a new video feature in Meta's Meta AI app that uses Black Forest's technology, was just released.
In 2024, the company raised $31 million in a seed round led by Andreessen Horowitz. This was followed by discussions about a larger round that would have valued the company at more than $1 billion. The new fundraising would represent one of the sector's fastest valuation increases if it were successful.
The momentum coincides with a surge in artificial intelligence investments worldwide. In the first half of 2025, investors invested $115 billion in AI startups, up from $145 billion for the entire year prior, according to PitchBook.
With Google's Veo, OpenAI's Sora, Black Forest's Flux, and now Meta's new Midjourney partnership fighting for supremacy, the funding push highlights how fiercely competitive AI image and video generation is becoming.
A multibillion-dollar valuation for Black Forest Labs would solidify its position as a growing European alternative to the AI behemoths of Silicon Valley.
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