Inside the HumanX in San Francisco’s Moscone Centre is a conference that makes you feel at the heart of AI. The building is crowded with technology leaders, while the offices of OpenAI and Anthropic can be found just around the corner. But a 70-person startup headquartered 5,000 miles away in Germany’s Black Forest—a region famous for its ham—has become a top competitor to Silicon Valley’s leading labs in AI image generation.
Black Forest Labs held a fundraiser in December. $3.25 billion Signing deals with Adobe to drive AI image-generation in Adobe’s graphic design platform Canva and signing contracts to power AI features for Adobe. Even major AI labs such as Microsoft, Meta, xAI and xAI have signed deals with it to provide similar functionality in their software.
Black Forest Labs has been able to pick its partners for nearly two years. Black Forest Labs was tapped by Elon Musk’s xAI in 2024 to help power Grok’s first image generator. The limited security measures of the chatbot generated much controversy. The partnership ended a few months later, when xAI created an AI image model in-house.
According to sources with knowledge of the issue, xAI contacted Black Forest Labs in the last few months about licensing its technology. The sources claim that Black Forest Labs has declined to work with xAI this time because it is too difficult from an operational standpoint. xAI’s response to WIRED was delayed.
In September, Black Forest Labs struck a $140 million multiyear deal Meta will now have access to Meta’s AI image-generation technologies.
The AI labs that are interested in Black Forest Labs do so because the image generators it offers rank just behind OpenAI’s and Google’s offering on the third party firm. Artificial Analysis’ benchmarks. The company also provides some of most popular text-to images models available on the internet. Hugging FaceThis means that many AI image-processing tools are powered by Black Forest Labs technology.
The company’s history has been marked by a lack of resources. The company has been able to develop a better research method called latent diffussion, in which an AI first creates a basic blueprint for an image before adding more detail.
Latent diffusion “enabled us to put out very powerful models that took orders of magnitude less resources than our competitor’s models,” “We are a co-founder of HumanX,” said Andreas Blattmann, in an interview onstage with WIRED at HumanX last week.
Black Forest Labs, despite its successes, believes that image generation is only the beginning. Blattmann revealed that Black Forest Labs plans to release a robot powered with one of its AI model later in the year. He did not disclose the company that makes the hardware. This push is part a bigger opportunity that the company has to create AI which can sense and act in the real world.
“Visual intelligence is so much more than content creation. Content creation is just the first segue into this entire technology,” Blattmann said “What I’m personally super excited about—and that’s a pattern throughout this conference—is physical AI.”
Sources tell WIRED that Black Forest Labs has also been in discussions with several hardware companies to provide features for products such as smart glasses or robots.
Construction in the Black Forest
Blattmann’s cofounders Robin Rombach and Patrick Esser gained a reputation in 2021 for publishing pioneering research into AI image models. Stability AI hired them in 2022 and they released Stable Diffusion – a popular AI image creator based upon their previous research. Two years later they announced that their departure was effective and started Black Forest Labs.
The trio chose not to move their headquarters to San Francisco but to remain in Freiburg. Blattmann said this was a key decision in the company’s growth.
