Black Forest Labs Receives Massive Funding To Lead AI Innovation

0:00Welcome to the podcast. I'm your host, Jaden Schaefer. Today on the show, we're talking about Black Forest Labs. Now, if you aren't familiar with this name, that's okay. I'm going to explain who they are and why they're important because they have just raised$300 million at a$3.25 billion valuation. So for a company that not a ton of people, unless you're really integrated in what's happening with AI, most people don't know them because you don't see them as something that you use very often, but you probably actually have used this company before, even if you didn't know it. And so we'll get into all of that on the show today.

0:34What they're going to be doing with this$300 million. They're an image generation platform, and they have some really impressive users, growth, and customers. We're going to get into all of that on the show today. Before we do, I wanted to mention, if you want to try Black Forest Labs out or any of the other AI models I talk about on the show, I'd love for you to go try out AIbox.ai. That's my own startup. It's$20 a month, and you get access to 40 of the top AI models, over 40. We're adding new ones. We just upgraded a whole bunch of ones this week. so if you want to go try them out everything from Gemini to OpenAI to Anthropic to 11 Labs for audio I know I personally spend over$300 a month on 11 Labs using their voices and a lot of their voice cloning stuff not for this show don't worry this is this is me if you ever use AI if you're ever listening to AI chat it is the real Jaden's voice you'll know that the day that you know some people complain they're like you say like too much or you stumble over your words too much the day that everything sounds too polished and professional, then you then you should start worrying.

1:36No, I'm just kidding. I'll be I'll be transparent if I ever use AI on the show. But I think basically, I'll probably always have my own voice on here. So you're in good luck. But anyways, I use I spent a ton of money on 11 labs, over$300 a month. And so if you want to get access to that model for only 20 bucks a month, go try a AI box dot AI, along with a ton of other stuff. I'll leave a link in the description. So the thing that I think is really impressive here with Black Forest Labs is their customer base. They were in the news last year because it was revealed that Grok, XAI, or, you know, X, formerly Twitter, in their image generation model, they were being powered by Black Forest Labs.

2:14This is a German AI lab company. And while they were able to raise this massive$300 million round, this was actually their Series B, by the way, and they had like a$3 billion valuation. This is because of the huge clients that they have, including XAI's Grok or X, where they're using this, they're using their API to generate images. So it's the same model that we have over on AI Box along with a bunch of other image generation models. Who actually put money into this though, is the question. We'll talk about what they're doing, but the round was led by Salesforce Ventures. So obviously a massive, you know, a powerhouse in AI right now.

2:53Anjay Media, who's the AMP. And then also they had participation from A16Z, Nvidia, North Zone, Creendom, Early Bird VC, Broadlight Capital, General Catalyst, right? And they had Brain Capital Ventures, Air Street Capital, Visionaries Club, Canva, Figma. I think what's interesting is when you look at the list of people that are investing, it gives you a good idea of who is using this AI model, right? When you have Canva investing in the company, you're like, oh, okay, this is probably who powers Canva's image generation or Figma. Okay, well, this is probably who powers today or will be powering in the future figma's image generation capabilities so it's kind of interesting um how these ai companies nowadays they're raising they just need so much money and at the same time someone like canva or figma doesn't really want to roll their own image generation model per se although they may at some point and so they kind of just it seems like they just invest into the companies uh that they're using which is i think a really interesting uh story in and of itself and of course i think another interesting component to this is the fact that they had nvidia investing in them um because nvidia is obviously a massive benefactor of their their model is actually called flux their image generation model their company's called black force labs but flux obviously needs a ton of compute in order to generate their images and so you just see nvidia basically going and investing in every major ai startup because they know that the money is going to come back to them and is going to boost their stock price it just is a giant circle where every AI company needs more chips and compute and if NVIDIA invests in them they give them money back to NVIDIA and NVIDIA you know keeps the flywheel going forever so I think this is interesting looking at who actually put money into this right now they said that all of the money that they have raised is going to be used for research and development which is interesting it's not specifically for compute etc which means that they're likely running at a profit, unlike a lot of AI companies today, which are kind of running at a loss.

4:48I think OpenAI and a number of others are running at a loss. But because of the way Black Forest Labs is structured, they will generate images. They power a lot of what's going on on these different AI-generated websites. But they do have an API they do charge for, and they are profitable. They're making money off of this. So their main model is for generating and also for editing images. I think they launched in August last year. So this is not a very old company, August 2024. And I think that they, you know, they obviously got in the news a lot when Elon Musk's Grok was using them to power the AI image generations inside of there.

5:25But they're also being used by a ton of other companies. Adobe is using them, which is kind of where you see this Figma investment. File.ai is using them. PixArt is using them. Eleven Labs also uses them for different image generation things on their platform. VSCO and also Vercel, all of them are plugged in. And that's who powers their image generation along with along with like a ton of other players. So while you might not be like super familiar with Black Forest Labs or Flux, like, oh, this is a company I know really well or use all the time. If you're using any of these other softwares, including Adobe and 11 Labs, like some of the biggest companies, you're probably using and you know, they like a lot of these companies are just like, oh, try a new image generation model that, you know, adds things in or even when you think of Adobe, like, for example, Adobe has a really cool feature that I've used in Premiere, which is if you have like a video and you need to like extend the video a couple seconds on either end, right?

6:17Adobe doesn't really specify who's powering that video generation where it like it like basically it's like cropping the video, but adding a little bit to the edge of the video. I've used this before when I needed to like change the dimensions for different things, or I needed to make the video a couple seconds longer or shorter. There's a lot of these really cool tools and they don't really say who powers them. So it is very likely that Blackforce Labs is powering those types of tools for image generation and image editing software. Right now, their startup said that the latest version of their image generation model, it's called Flex 2.

6:50They say its features are, it's like specifically is really good at having better text and also image rendering. They use up to 10 different images as a reference to kind of keep the right style and tone while they generate images, which is something that's really, I mean, honestly amazing. Their model can also generate images at up to 4k pixels, which is great. I think a problem with like Nano Banana and a lot of the other ones I've used is like the low quality and it's hard to get them to generate or find ones that are capable of generating HD images. So they can do 4k images, which is amazing.

7:21They have a couple co-founders, Robin, Rob Mack, Patrick Esser, Andres Blateman. They were all formerly researchers who helped create Stability AI's stable diffusion models. And then they went over and created Black Forest Lab. So I love to also see the spinoff of you have these kind of big AI companies like Stable Diffusion, who are kind of pioneers and leaders in the space. And then from their research department, it spun off a whole bunch of researchers that now understand how to build those models and go make their own companies, which I think increases competition in the market. They create all sorts of new and interesting things.

7:54And of course, in the case of Black Forest Labs, like this is a massive powerhouse powering a ton of the big software companies, AI models today and their image. So very exciting. Big congratulations to the entire team on this$3.25 billion valuation and the$300 million raise. Thanks so much for tuning into the podcast. If you enjoyed it, if you learned anything new about the AI industry and about some of these companies, what really helps the show a lot, and honestly, it's just a big favor to me. So if you appreciate what what I do on the show. If you could leave a rating and review on the show, it helps out like a ton for new people to find the show.

8:30It's basically one of the biggest factors on how Apple ranks shows in their charts and shows, you know, the podcast off to new people is how many like new reviews we get in. So if you could leave a rating and review, it would it would be a huge thank you to me. And I really appreciate you joining in. As always, make sure to go try out AIbox.ai if you want to try all the models I talk about on the show, including Flux from Blackforce Labs, and I will catch you in the next episode.