- Google has invested in generative AI startup Runway as part of a $100 million round, according to sources.
- Google and Runway also signed a $75 million cloud computing project, according to leaked documents.
- As cloud computing growth slows, cloud providers are betting more on AI.
Google invested in generative AI startup Runway as part of a $100 million deal as the Alphabet-owned company leverages the benefits of the cloud to get along with other artificial intelligence players.
Additionally, Runway has signed a three-year, $75 million cloud deal with Google, according to internal documents seen by Insider. The contract will be signed on April 28th and will take effect on August 30th.
An insider previously reported that Runway has raised at least a $100 million Series D funding round at a $1.5 billion valuation from a top cloud provider. Two sources familiar with the matter say that the mystery entity is Google. The Information previously reported on the deal.
This New York-based startup offers technology that converts images and videos to text.The tool was used as part of the production of the Oscar-winning film Everything at once, wherever you are. The new round brings Runway’s valuation to $1.5 billion, tripling from its $500 million valuation in its Series C round just six months ago. The company has raised $100 million to date from Amplify Partners, Lux Capital, Coatue and Felicis Ventures.
According to a cloud credit transaction agreement reviewed by Insider, Runway has about $20 million in credits and has requested up to $270,000 to use toward support fees from Google. Offering these credits is standard practice for this kind of cloud transaction, but access to this infrastructure is essential for AI startups like Runway to grow.
Google declined to comment. Runway did not respond to multiple requests for comment.
The partnership could see Runway pulled from a major Google competitor. In March, Runway announced a multi-year “strategic research partnership” with Amazon as its preferred cloud service provider. The investment means Runway is eyeing Google’s cloud services.
As the cloud infrastructure market and demand for cloud services slow down after years of relentless growth, cloud providers are increasingly betting on AI as a driver of growth. Google’s investment in Runway is just the company’s latest bet on AI model builders. The company invested about $300 million in OpenAI rival Anthropic last year, according to a Financial Times report.
These investments continue the recent trend of AI companies being funded by cloud players, often with access to valuable cloud computing resources. For example, the $1 billion Microsoft invested in OpenAI in 2019 was split between cash and credits to Microsoft’s cloud business, Azure, MIT Technology Review reported in 2020.
