OpenAI and Thrive Capital Disrupt Hollywood

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THE HOTTEST THING IN TECH
OpenAI and Thrive Capital Disrupting Hollywood

AI is coming for the entertainment industry as A24 and OpenAI are set to disrupt film and music. Many VCs are making bets on this AI-enhanced entertainment future. The Civil War producer A24 announced yesterday it has raised $250 million at a $3.5b valuation in a round led by Thrive Capital. Thrive — which invested ~$75M itself — is run by Jared Kushner’s brother, Josh Kushner and is one of OpenAI’s biggest investors.

Why it Matters

Thrive appears to be a betting on AI disrupting the industry. Kushner will join the A24 board so will have some sway over the studio’s adoption of AI. The Information’s Kate Clark writes, “The arrangement gives A24 access to a group of venture capitalists that specialize in AI… Kushner’s Rolodex could give A24 a head start over competitors in experimenting with new AI technologies.”

A24 clearly wants to be ahead of the game in making this transition as a pioneer of OpenAI’s Sora AI video generation tools. A24 reportedly plans to use the capital to expand into more IP–driven, big-budget commercial projects and other entertainment verticals like live performance and music. Sora would help significantly with this expansion by reducing manual work and increasing efficiency across various areas of the production process.

Sora AI Hits Cannes Festival

A24 is far from alone in this. Retailer Toys R Us just debuted a short promotional film at the 2024 Cannes Lions Festival, which was created by the retailer’s creative agency using early access to Sora. While the bulk of the film was made with Sora, humans handled corrective visual effects. various other industry insiders are involved as early access Sora users already.

Industry Pushback

Wherever there is disruption there are victims. Earlier this week the Recording Industry Association sued two gen AI music companies - Suno and Udio - over "copyright infringement involving unlicensed copying on a massive scale.” The suits were brought on behalf of music industry heavyweights Universal, Warner Music and Sony in a significant escalation of the fight between the music industry and AI companies.

Also, a major Hollywood workers union, IATSE, just signed a tentative three-year deal on AI-use with top studios. The deal includes agreed worker pay hikes and guardrails against the use of AI in films.

AI Future-tainment

Such rearguard actions may slow the onslaught, but as with any new media technology, they tend to just shift the disruption to more radical emerging players like A24 who attract more capital and outcompete the slow adopters. The VCs are lining up to get their pound of flesh from the AI dream factory.

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DEALS WE’RE WATCHING
Closed Deals:

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No-Code CRM Unicorn - Boston startup Creatio raised a $200M growth round at $1.2b led by Sapphire Ventures, & backed by StepStone, Volition and Horizon. Revenue is up 50% y-o-y and it will expand its AI capacity.

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Deals to Watch:

Groq - The AI chipmaker released a new “language processing unit,” pre-trained for speech-based applications to developers on GroqCloud. It's also raising a new round led by Blackrock at ~$2.5b, doubling its valuation.