TECH
New York City’s Runway was the pioneering leader in AI-generated video for years. Now ChatGPT maker OpenAI is coming for it.
CRISTÓBAL VALENZUELA is no stranger to weird, scary creatures. As cofounder and CEO of Runway, a five-year-old New York City startup that develops AI tools for video, his company’s product has brought to life a parade of surreal on-screen characters, from shape-shifting dolls that melt into walls to dancing giants with contorted faces.
When I talk to Valenzuela on a winter afternoon, the conversation is about why some scary creatures—even the most menacing giants—aren’t really scary if you know how to destroy them.
“Sometimes a sling and a stone is all you need,” Valenzuela tells me.
We’re talking about slings and stones because of the imposing shadow stretching over Valenzuela’s company. Days before our chat, OpenAI, the $86 billion, Microsoft-backed juggernaut of generative AI, unveiled its latest creation: a text-to-video tool called Sora that essentially does what Runway does; in some cases, maybe better.
As with Runway’s product, Sora lets users type a description of a scene into their computer—a woman walking along a puddlefilled street, for instance, or a fire-breathing dragon in flight—and within moments watch a video that looks as if it were produced in Hollywood.
Sora’s buzzy unveiling caused instant speculation about the tidal wave of change headed for the entertainment industry. As if on cue, filmmaker Tyler Perry said he was putting on hold a planned $800 million expansion of his Atlanta production studio because of Sora. By late March, OpenAI execs were reportedly setting up meetings with studio execs and talent agencies to discuss how to use the tool.
For tech firms, bringing the magic of AI to video is a massive business opportunity, spanning film, television, video games, advertising, and the burgeoning online creator industry, to name just the most obvious candidates. Since its founding in 2018, Runway has made inroads into many of these markets, building relationships with TV and film studios whose staff use its AI-powered editing tools, contributing to music videos by artists like Kanye West, and dazzling creatives with its text-to-video app.
Now, almost overnight, a market Runway was quietly shaping on its own terms has morphed into a battleground. Runway is hardly a minnow—it raised $141 million in funding from backers including Google and Nvidia last year, and boasts a $1.5 billion valuation—but it’s now facing a direct challenge from a rival several times its size and helmed by the AI industry’s most influential entrepreneur and fundraiser, OpenAI cofounder
