Global Courant
An animated avatar generated by the AI video platform Synthesia.
Synthesis
Synthesia, a digital media platform that allows users to create artificial intelligence-generated videos, has raised $90 million from investors including U.S. chip giant Nvidia, the company told CNBC exclusively.
The London-based company raised the money in a funding round led by Accel, an early investor in Facebook, Slack and Spotify. Nvidia came in as a strategic investor, putting in an undisclosed sum. Other investors include Kleiner Perkins, GV, FirstMark Capital and MMC.
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Founded in 2017 by researchers and entrepreneurs Victor Riparbelli, Matthias Niessner, Steffen Tjerrild and Lourdes Agapito, Synthesia develops software that allows people to create their own digital avatars to give company presentations, training videos or even compliments to colleagues in more than 120 different languages.
The ultimate goal is to eliminate cameras, microphones, actors, lengthy editing and other costs from the professional video production process. To do that, Synthesia has created animated avatars that look and sound like humans, but are generated by AI. The avatars are based on real actors speaking in front of a green screen.
“Productivity can be improved because you reduce the cost of producing the video to that of making a PowerPoint,” Philippe Botteri, at Accel, the lead investor in Synthesia’s Series C, told CNBC, adding that the adoption of video has increased through consumer platforms like YouTube, Netflix and TikTok.
“Video is a much better way to convey knowledge. When we think about the potential of the company and its valuation, we think about what it can deliver, (and) in the case of Synthesia, we’re just getting started .”
Synthesia is a form of generative AI, similar to OpenAI’s ChatGPT. But the company says it’s been working on its own proprietary generative AI for years, and that while ChatGPT may have only recently entered the public consciousness, generative AI itself isn’t a new technology.
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Synthesia sells to corporate clients including Tiffany’s, IHG and Moody’s Analytics. The company doesn’t disclose its sales or revenue stats, though it says it has “driven consistent triple-digit growth,” with more than 12 million videos produced on the platform to date. The number of users on Synthesia increased by 456% year over year, the company said.
Synthesia plans to invest more in its technology, with a particular focus on advancing its AI research and enabling Synthesia avatars to perform more tasks.
“We work with 35% of the Fortune 100 (with a focus on) product marketing, customer support, customer success — areas of the business where you have a lot of text that you want to turn into video,” Riparbelli told CNBC.
“As we move into the next phase of the next generation of Synthesia technology, it’s about making the avatars more expressive, able to do more things, move around a room, have conversations,” he added.
Riparbelli explained that Nvidia isn’t just a semiconductor manufacturer – it’s also a powerhouse of research and development talent with an army of engineers, academics and researchers producing articles on the subject.
“They’re not just a chip maker,” he said. “They have great research teams that are very at the forefront of, how do you actually train these big models? What works, what doesn’t work?”
Investor interest in AI
Business Insider previously reported that Synthesia was in talks with investors to raise between $50 million and $75 million in new funds at a valuation of approximately $1 billion.
The report did not include details of Nvidia’s involvement, nor did it mention the total $90 million raised.
Synthesia is one of many companies generating interest from investors with AI and enterprise software that can lower the cost of certain business processes. Businesses are trying wherever they can to cut costs to counter rising inflation and prepare for a possible recession.
Last week, French business planning software company Pigment raised $88 million from investors including Iconiq Growth, Felix Capital, Meritech IVP and FirstMark, in part to ramp up its investment in AI.
Generative AI has been a rare bright spot in a European tech market that has been reeling from shrinking funding and declining valuations. Investors have left high-growth technology companies in favor of value sectors with more resilient income generation, such as financials, industrials, energy and consumer staples.
Recently, a report from venture capital firm Atomico showed that funding for European technology startups is on track to fall another 39% in 2023 to $51 billion from $83 billion in 2022.
However, AI was one area that attracted more investment, Atomico said, with generative AI accounting for 35% of total investment in AI and machine learning companies last year — the highest share ever and a big jump from 5% in 2022.
Ethical concerns about deepfakes
There’s a concern that using video AI tools as advanced as Synthesia could lead to deepfakes, videos that take on a user’s likeness and manipulate them to make it seem like they’re saying or doing something they’re not.
There are also increasing calls from technology leaders and academics for a global pause in AI development outside of systems such as OpenAI’s GPT-4 over fears that the technology will become so advanced that it could pose an existential risk to humanity.
Synthesia first drew mainstream attention in 2019 for a deepfake video featuring a digitally animated version of famed footballer David Beckham speaking about a campaign to end malaria in nine languages.
While done with Beckham’s permission and for a good cause, more widespread use of deepfake technology has raised concerns about the possibility of misinformation.
To address that, Synthesia says it has kept ethics in mind when developing its software. The company requires permission from the people who appear as avatars in its software, and uses a mix of humans and machine learning to target material such as profanity and hate speech.
It is also affiliated with Responsible Practices for Synthetic Media, a voluntary industry-wide framework for the ethical and responsible development, creation and sharing of synthetic media.
“There’s a lot of different discourses going on right now. There’s one about very long-term existential risk scenarios. I think they’re also important to talk about. But I’d like to see more focus on where we are today?” Riparbelli told CNBC in an interview.
“These technologies are already powerful. How do we deal with hallucinations? How do we deal with all the problems that arise?” he added. “There are certainly pitfalls. But there are also so many opportunities in it, I think, to level the playing field and empower people to do much more with less.”
