Adobe Invests in AI Video Startup Synthesia, Betting on the Future of Corporate Communication

Adobe takes stake in Synthesia, startup behind AI clones for corporate videos

LONDON -- Adobe has invested in Synthesia, a British artificial intelligence startup, in a bet that the technology will transform video production. Synthesia told CNBC that Adobe's venture capital arm injected an undisclosed amount of funds into the startup as part of a "strategic" partnership, without elaborating further on financial and commercial terms. The startup, which says it serves more than 70% of the Fortune 100, sells a platform that businesses can use to develop videos with life-like avatars generated by AI. Individuals can make their own AI avatars, either at one of Synthesia's production studios or on a personal device. Adobe, a creative technology powerhouse valued at roughly $150 billion, is best known for the Photoshop image editing tool. The company also makes Premiere Pro, a video editing platform widely used by professionals in broadcast media, advertising and other industries.

Adobe Invests in AI Clone Startup Synthesia

Adobe has invested in a British startup called Synthesia, a $2 billion company that creates AI-generated avatars from text prompts for corporate clients. The specifics of the deal hasn't been revealed but Synthesia CEO Victor Riparbelli confirms the deal to CNBC, by saying: "We're building the world's leading AI video platform for enterprise, and Adobe's investment validates that direction. We share a vision: democratizing high-quality content creation and making enterprise communication faster and more effective." Syntesia claims its AI avatar platform is used by over 70 percent of Fortune 100 companies. The London-based firm offers tools that allow users to create lifelike videos without cameras or actors. Users can even craft personal AI avatars, either at one of Synthesia's studios or directly from their own devices. Last week, The Guardian reported that Synthesia struck a licensing deal with stock photo website Shutterstock to use its library of video footage to train AI models. The idea is that this extra training data will help to produce AI clones that are even more realistic. "Thanks to this partnership with Shutterstock, we hope to try out new approaches that will ... increase the realism and expressiveness of our AI-generated avatars, bringing them closer to human-like performances," says Synthesia. Back to the Adobe deal, this isn't the first time Adobe has courted a rising star in the creative tech space. The company's $20 billion bid to acquire collaborative design platform Figma collapsed in 2023 after EU and UK regulators raised antitrust concerns. Beyond acquisitions, Adobe has also been steadily expanding its venture portfolio with stakes in startups like Captions and VidMob. Synthesia is focused on corporate AI avatars and says it does not permit the use of its stock clones for political or news purposes. Nevertheless, back in 2023, it was revealed that the Venezuelan government used Syntheisia to make fake, AI-generated television presenters that spread disinformation. At the time, the company noted "how difficult moderation is" in the world of AI. Despite concerns that include copyright as well as misinformation, the AI video space is humming along nicely as Synthesia revealed it has surpassed $100 million in annual recurring revenue (ARR) -- a key metric that tracks predictable subscription income. "We've grown approximately 100% year-over-year, driven by strong customer expansion and best-in-class unit economics," Riparbelli tells CNBC. "Surpassing $100 million in ARR puts us in a very small group of AI-native companies with real commercial traction." Despite the milestone, profitability remains on the back burner. Synthesia posted a pre-tax loss of £25.2 million on revenues of £25.7 million in 2023, according to filings with the U.K.'s Companies House. "Profitability is not an immediate focus," Riparbelli tells CNBC, though he emphasizes the company sees a clear route to positive earnings. "We've never chased growth at any cost." Synthesia was last valued at $2.1 billion during a January funding round. The startup faces competition in the AI video space from companies such as Colossyan, DeepBrain AI, Invideo AI, Filmora, and Veed.io -- as well as from OpenAI's text-to-video model, Sora.