Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Standing inside HumanX Conference at the Moscone Center in San Francisco, it’s hard not to feel like you’re at the center of the AI world. Technology leaders flock to the building, and OpenAI and Anthropic are headquartered at the bottom of the building. But a 70-person startup headquartered 5,000 miles away in Germany’s Black Forest — a region famous for its pork — has become a bigger rival to Silicon Valley labs pioneering AI image generation.
In December, Black Forest Labs raised funds at a $3.25 billion Evaluation, after signing deals to power AI image creation features at Adobe and graphic design platform Canva. It has even entered into agreements with major AI labs like Microsoft, Meta, and xAI to power similar features in their products.
Nearly two years after its launch, Black Forest Labs can afford to be selective about who it works with. In 2024, Elon Musk’s xAI technology has harnessed Black Forest Labs for power Grok’s first photo creator. This partnership put Black Forest Labs on the map but generated a lot of controversy due to the chatbot’s limited guarantees. It ended months later when xAI developed an internal AI image model.
In recent months, xAI approached Black Forest Labs about licensing the startup’s technology again, sources familiar with the matter told WIRED. The sources said that Black Forest Labs refused this time, considering it operationally too difficult to enter into a partnership with xAI, which is known for its chaotic work environment. xAI did not immediately respond to WIRED’s request for comment.
In September, Black Forest Labs hit a Multi-year deal worth $140 million To give Meta access to AI image generation technology.
These AI labs want to work with Black Forest Labs because their image generators are among the best in the world, ranking just below OpenAI and Google’s offerings at an outside company Synthetic analysis standards. The startup also offers some of the most downloaded text-to-image templates Face huggingwhich suggests that a lot of AI photo tools on the market are likely powered by a free version of Black Forest Labs’ technology.
It’s especially impressive given that the company has historically had far fewer resources than its competitors. This has led to a more efficient line of research called latent diffusion, which essentially occurs when the AI model first sketches a rough outline of the image, and then draws in more detail.
Latent Ubiquity “enabled us to come up with very powerful models that require fewer resources than our competitors’ models,” co-founder Andreas Blattmann said in an interview with WIRED on stage at HumanX this week.
Despite its success, Black Forest Labs believes generating images is just the beginning. Blattman said the startup plans to unveil a robot powered by one of its AI models later this year. (The company that makes the devices was not revealed.) This push is part of a larger opportunity the company sees to build artificial intelligence that can perceive and take actions in the physical world.
“Visual intelligence is much more than just content creation,” Blattman said. “Content creation is just the first part of this whole technology.” “What I’m personally very excited about — and this has been the pattern throughout this conference — is physical AI.”
Black Forest Labs is also in talks with a few hardware companies, to power the features into products like smart glasses and robots, sources told WIRED.
Building in the Black Forest
Blattman and his co-founders, Robin Rumbach and Patrick Esser, made a name for themselves by publishing some groundbreaking research on AI image models in 2021. In 2022, they were hired by Stable AI and released Stable Diffusion, a popular open source AI-driven image generator based on their previous research. But after two years, they announced their departure and launched Black Forest Labs.
Instead of moving to San Francisco, the trio decided to maintain headquarters near their hometown of Freiburg, Germany. Blattman said the decision was key to the company’s success.