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November 22, 2023updated 23 Nov 2023 11:34am

Adobe buys its first generative AI start-up

Rephrase.ai is the latest in a series of AI investments for the multinational software firm.

By Greg Noone

Adobe has reportedly acquired Indian generative AI start-up Rephrase.ai, which specialises in creating “hyper-personalized” videos for businesses. 

The cost of the acquisition has not been disclosed but, if confirmed, it will be Adobe’s first in the generative AI space. Like many software vendors, Adobe has been building out its AI capabilities in recent months to meet growing demand from customers. 

Adobe did not respond to a request for comment before publication. Rephrase.ai did not confirm its takeover by Adobe directly, but did forward a generic statement from the design software provider stating that it had “a strong track record of accelerating growth through both organic and inorganic innovation” and that it is “always on the lookout for new talent and technology that supports our strategy and creates more value for our stakeholders”.

The Adobe icon, illustrating a story about an AI acquisition made by the company.
Adobe has reportedly acquired Rephrase.ai, an Indian start-up specialising in creating videos using generative AI. (Photo by r.classen/Shutterstock)

Adobe, Rephrase and the AI marketing boom

Bengaluru-based start-up Rephrase uses AI to create what it describes as “digital avatars of actual humans” from text prompts for use in video content. According to The Economic Times, which broke the story, most of Rephrase.AI’s staff will now move to Adobe.

“The Rephrase.ai team’s expertise in generative AI video and audio technology and experience-building text-to-video generator tools will extend our generative video capabilities,” wrote Adobe’s senior vice-president and general manager, Ashley Still, in an internal memo cited by ET. The deal would enable Adobe “to deliver more value to our customers faster – all within our industry-leading creative applications”. 

Last year, the start-up raised $10.6m in funding. It is best known for its participation in the “#NotJustACadburyAd” campaign spearheaded by advertising agencies Mondelez International and Ogilvy. The campaign allowed small shops across India to create micro-sites promoting their establishments using AI-enhanced footage of Bollywood star Shah Rukh Khan

Even before purchasing Rephrase, Adobe has bet heavily on generative AI in the past year, with the design giant keen on emphasising the technology’s utility in marketing and illustration applications. In June, it released Firefly, an enterprise image generation tool used for the creation of creative content across multiple corporate departments. 

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Adobe also debuted new AI-powered features in its Photoshop and After Effects platforms, allowing users to add aspects to photos and images and remove background noise from audio files using text prompts. In October the firm also announced “Project Primrose,” a dress designed to respond to the wearer’s emotions using generative AI. 

Figma of the imagination?

Adobe has also proven sensitive to AI-related controversies related to potential copyright infringement in recent months, promising that it would indemnify any enterprise customers caught up in civil lawsuits related to the issue. 

The company was also one of eight companies that signed up to US President Biden’s voluntary AI governance scheme in September calling for the watermarking of all AI code to better track its provenance across the internet. The following month Adobe created its symbol – the letters ‘cr’, short for ‘CRedentials,’ in a pointed bubble – that would, it said, be used to establish that new creative works were made using AI tools.

Its acquisitions elsewhere have proved difficult to finalise. In September 2022, Adobe announced a deal to buy the cloud-based designer platform Figma for $20bn. Since then, the takeover has been mired in regulatory controversy, with the UK and the EU launching separate antitrust investigations into the deal. 

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