(Bloomberg) -- Black Forest Labs, the German artificial intelligence startup that helps Elon Musk’s Grok produce images, is in talks to raise as much as $200 million from investors including Andreessen Horowitz less than four months after it launched.
The potential financing, led by Andreessen Horowitz, would give the startup a valuation of more than $1 billion, according to people familiar with the plans, who asked not to be identified discussing private information. No final decisions have been made and the amount of funding could still change, they said.
A round this size shows remarkable growth for the company, whose founding team includes several computer scientists involved in creating AI image generator Stable Diffusion. Black Forest Labs disclosed a $31 million seed investment in August led by Andreessen Horowitz that included Brendan Iribe, a co-founder of Oculus Rift, and Garry Tan, the head of startup incubator Y Combinator. Venture fund General Catalyst participated in a follow-up deal of an undisclosed amount.
Black Forest Labs is wary of taking too much money too quickly, or raising cash at an overly high valuation, according to one of the people. The startup is concerned that would put additional pressure on the team to expand rapidly, the person said.
The interest in the startup may have been sparked by its high-profile early partner. Musk’s Grok chatbot introduced an image-generating feature this summer, resulting in a flurry of bizarre computer-generated photos on the social media platform X. Musk’s company xAI, which powers Grok, said it was “experimenting” with software made by Black Forest Labs to create the images.
Startups that work with AI image generation, such as Stability AI, have faced copyright challenges over material they use to train models.
Representatives for Black Forest Labs and Andreessen Horowitz declined to comment.
TechCrunch reported earlier on aspects of the financing.
©2024 Bloomberg L.P.