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Standing inside the HumanX conference in San Francisco\u2019s Moscone Center, it\u2019s hard not to feel like you\u2019re at the center of the AI universe. Technology leaders swarm the building, and the headquarters of OpenAI and Anthropic are just down the block. But a 70-person startup headquartered 5,000 miles away in Germany\u2019s Black Forest\u2014a region famous for its ham\u2014has become a top competitor to Silicon Valley\u2019s leading labs in AI image generation.<\/p>\n
In December, Black Forest Labs raised funds at a $3.25 billion valuation, after signing deals to power AI image-generation features in Adobe and the graphic design platform Canva. It has even struck agreements with major AI labs like Microsoft, Meta, and xAI to power similar features in their products.<\/p>\n
Nearly two years after launch, Black Forest Labs can afford to be picky about who it works with. In 2024, Elon Musk\u2019s xAI tapped Black Forest Labs to power Grok\u2019s first image generator. That partnership put Black Forest Labs on the map but generated a lot of controversy due to the chatbot\u2019s limited safeguards. It ended months later when xAI developed an in-house AI image model.<\/p>\n
In recent months, xAI approached Black Forest Labs about licensing the startup's technology again, sources familiar with the matter tell WIRED. This time around, Black Forest Labs declined, the sources said, deeming it too operationally difficult to partner with xAI, which has a famously chaotic work environment. xAI did not immediately respond to WIRED\u2019s request for comment.<\/p>\n
In September, Black Forest Labs struck a $140 million multiyear deal to give Meta access to its AI image-generation technology.<\/p>\n
These AI labs want to work with Black Forest Labs because its image generators are among the world's best, ranking just below OpenAI and Google's offerings on the third-party firm Artificial Analysis' benchmarks. The startup also offers some of the most downloaded text-to-image models on Hugging Face, indicating that a lot of AI image tools on the market are likely powered by a free version of Black Forest Labs\u2019 technology.<\/p>\n
It\u2019s particularly impressive since the company has historically had far fewer resources than its competitors. This has led it to a more efficient line of research called latent diffusion, which is essentially when an AI model first sketches out a rough blueprint of an image, and then paints in more detail.<\/p>\n
Latent diffusion \u201cenabled us to put out very powerful models that took orders of magnitude less resources than our competitor\u2019s models,\u201d said cofounder Andreas Blattmann in an interview with WIRED onstage at HumanX this week.<\/p>\n
Despite its success, Black Forest Labs believes image generation is just the beginning. Blattmann said the startup plans to unveil a robot powered by one of its AI models later this year. (He did not reveal what company is making the hardware.) The push is part of a larger opportunity the company sees to build AI that can perceive and take actions in the physical world.<\/p>\n
\u201cVisual intelligence is so much more than content creation. Content creation is just the first segue into this entire technology,\u201d said Blattmann. \u201cWhat I\u2019m personally super excited about\u2014and that\u2019s a pattern throughout this conference\u2014is physical AI.\u201d<\/p>\n
Black Forest Labs is also in talks with a handful of hardware companies, to power features in products like smart glasses and robots, sources tell WIRED.<\/p>\n
Blattmann and his cofounders, Robin Rombach and Patrick Esser, made a name for themselves publishing some groundbreaking research on AI image models in 2021. In 2022, they were hired by Stability AI and released Stable Diffusion, a popular open source AI image generator based on their prior research. But two years later, they announced their departure and launched Black Forest Labs.<\/p>\n
Rather than move to San Francisco, the trio decided to maintain a headquarters near their hometowns in Freiburg, Germany. Blattmann said the decision has been key to the company\u2019s success.<\/p>\n
\u201cIt can be a huge asset to not be where everyone else is,\u201d he added. \u201cEveryone who has ever run a startup knows that it\u2019s a lot about the ability to focus and work on what matters. Whenever I\u2019m here in SF I love it, but it\u2019s also very hard to focus because there\u2019s so much stuff going on.\u201d<\/p>\n