It was just about the most L.A. night you could imagine: I was en route to a film festival being held at the historic Orpheum Theater downtown—and late after getting caught in the city’s customarily soul-crushing traffic.
So, I rolled into Runway’s AI Film Festival well after the press hour had ended, and was unsure of what I was about to see. But Runway CEO and cofounder Cristóbal Valenzuela was gracious enough to find me in the theater’s quasi-basement lounge, where seemingly only David Bowie played. There, I asked him why he’d chosen the Orpheum, an old vaudeville theater first built in 1926.
“It’s part of the history of cinema and culture, and it’s so reminiscent of the past, and I think I use the past a lot as an allegory to make sense of the future,” he told me.
And that’s what the evening was about, ultimately: the tension between films’ past and its future. An AI-generated video leader with a $1.5 billion valuation, Runway represents a future. The company’s investors include Nvidia, Google, Salesforce Ventures, Felicis, Coatue, and Lux Capital, and it has raised north of $230 million since its inception in 2018. Runway is also battling the arrival of OpenAI’s text-to-video tool Sora.
Runway’s film festival is growing: The event received 300 submissions in its first year; this year there were 3,000 submissions. But not everyone in Hollywood sees the advent of AI technology as a cause for celebration. Many beleaguered creatives fear that their jobs are on the line—and that technology built by companies like Runway will take those jobs.
The company walked head-on into addressing concerns in a panel before the programming began. The panel featured Valenzuela and a number of filmmakers and artists, including producer Joel Kuwahara, known for his work on The Simpsons and Bob’s Burgers.
“I was on The Simpsons in the mid-90s when it was on film–each cell of animation was hand-painted,” Kuwahara told the audience. “Back then, it took about nine months to make an episode of The Simpsons.”
You’d think technology would have shortened this process, right? Think again. With computers, tablets, advanced editing software, and more, Kuwahara said: “You know how much faster we make the shows now? It takes us about 11 months.”
It was a night about art, but also about commerce in that way, as Valenzuela and the artists on the panel worked to make sense of what the movie business may become. Valenzuela made the point that, eventually, AI-made movies may have their own name alltogether, becoming a new category of art, rather than supplanting what we know as movies.
“I feel like this is a moment in time where we’re seeing a new camera,” he told the audience.
Now, the counterargument here is that AI is not a camera, and that a camera is a camera. Which while fair, is also not entirely true. People famously panicked about the switch from film to digital, too. We still call them films, but very few are actually film.
As I watched the featured short films (the best of the 3,000 submissions), I wondered how I’d react, or if I would even like an “AI film,” whatever that means. But, ultimately, it was predominantly impressive art and, if anything, the movies that I didn’t like had incredibly normal Art Film Problems, where something is visually gorgeous and narratively obtuse.
My favorite short film of the night was called: “Where Do Grandmas Go When They Get Lost?”
A whimsical meditation from a child’s perspective, the narrator at the end says:
“So, where is my grandma? I don’t know, but I can feel that she is very close…Grandma, I hope that wherever you are, you can also feel me, and all the love I have for you.”
And I cried. And does it matter if it’s AI if it still makes you cry?
Elsewhere…My colleague Jessica Mathews scooped the departure of David Kim from Carta. A top executive at the company, Kim was involved in the company’s embattled liquidity business. Read the whole story here.
This month’s cartoon…Here’s our cartoon for May, by Ian Foley.
See you Monday,
Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Joe Abrams curated the deals section of today’s newsletter.
VENTURE DEALS
- Altruist, a Culver City, Calif.-based developer of account opening, funding, reporting, and billing software for registered investment advisors, raised $169 million in Series E funding. ICONIQ Growth led the round and was joined by Granite Capital Management and existing investors Adams Street Partners and Sound Ventures.
- Karius, a Redwood City, Calif.-based developer of technology that can test for over 1,000 pathogens with one blood sample, raised $100 million in Series C funding. Khosla Ventures, 5AM Ventures, and Gilde Healthcare led the round and was joined by Seventure Partners and existing investors Softbank Vision Fund 2, General Catalyst, HBM Healthcare Investments, and others.
- Delphia Therapeutics, a Cambridge, Mass.-based platform designed to develop cancer medicines designed to combat drug resistant cancers, raised $67 million in Series A funding from GV (Google Ventures), Nextech Invest, Polaris Innovation Fund, and Alexandria Venture Investments.
- LayerX, a Tel Aviv, Israel-based browser security platform, raised $26 million in Series A funding. Glilot+ led the round and was joined by Dell Technologies Capital and others.
- AISAP, a Ramat Gan, Israel-based developer of an AI-powered ultrasound diagnosis platform, raised $13 million in seed funding from Harel Insurance Investments & Financial Services, Shoni Health, and others.
- Volta, a Las Vegas, Nev.-based secure digital wallet platform, raised $4.1 million in seed funding from Fika Ventures, Haven Ventures, Soma Capital, Dispersion Capital, and Uphonest Capital.
- RunReveal, an Austin, Texas-based security information and event management platform designed for threat detection, raised $2.5 million in seed funding from Costanoa Ventures.
- Maia Farms, a Vancouver, B.C.-based developer of mushroom and mycelium-based protein ingredients designed to improve food texture and taste, raised $2.3 million in pre-seed funding. Joyful Ventures, PIC Group, and Koan Capital led the round and were joined by angel investors.
PRIVATE EQUITY
- Industrial Opportunity Partners and Goldman Sachs Asset Management agreed to recapitalize Transcendia, a Franklin Park, Ill.-based film manufacturer for the health care, food and beverage, and other industries. The transaction includes $114 million in new capital and the elimination of more than $200 million of the company’s debt.
- Patricof Co, representing clients like DK Metcalf, Jason Kelce, Flau’jae Johnson, and Deja Kelley, invested approximately $10 million in Bazooka Candy Brands, a New York City-based candy company.
- Accel-KKR acquired Accertify, an Itasca, Ill.-based provider of fraud prevention, chargeback management, and other services. Financial terms were not disclosed.
- Charger Investment Partners acquired Wolf-Gordon, a New York City-based designer, marketer, and supplier of interior surface products. Financial terms were not disclosed.
- Knox Lane acquired a majority stake in All Star Healthcare Solutions, a Deerfield Beach, Fla.-based health care staffing firm. Financial terms were not disclosed.
EXITS
- Breck Partners acquired NPX One, a Reading, Pa.-based manufacturer of foam trays for food processors, supermarkets and food distributors, from Atlas Holdings. Financial terms were not disclosed.
- Ntiva, a portfolio company of PSP Capital, acquired The Purple Guys, a Shreveport, La.-based provider of managed IT services to small and medium sized businesses, from Kian Capital Partners. Financial terms were not disclosed.
- Permira agreed to acquire a majority stake in BioCatch, a Tel Aviv, Israel-based digital fraud, anti-money laundering, and impersonation detection platform for banking and financial services organizations, from Bain Capital Tech Opportunities and Maverick Ventures. Financial terms were not disclosed.
- Stantec acquired Hydrock, a Bristol, U.K.-based engineering design, energy, and sustainability consultancy, from BGF. Financial terms were not disclosed.
OTHER
FUNDS + FUNDS OF FUNDS
- Latticework Capital Management, a Dallas, Texas-based private equity firm, raised $345 million for their second fund focused on middle market health care companies.
- Imec.xpand, a Leuven, Belgium and Amsterdam, Netherlands-based venture capital fund, raised €300 million ($322 million) for a new fund focused on semiconductor and nanotechnology companies.
- Silver Lake, a Menlo Park, Calif.-based private equity firm, hired Jim Whitehurst as a managing director. Formerly, he served as interim chief executive officer of Unity and was once senior advisor at Silver Lake.
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