A24, the independent entertainment studio powerhouse behind the recent hit “Backrooms,” is partnering with Google’s DeepMind division to develop AI-powered tech for filmmakers. The deal, according to The Wall Street Journal, also includes a $75 million investment from Google in A24.
Unlike recent tie-ups between Silicon Valley and Hollywood, which have seen studios invest in tech companies, this time it’s a tech company paying for a stake in a studio. It also comes on the heels of a huge spike in VC investment in AI content creation and prosumer applications over the past three years.
Deal value for content creation and prosumer startups has surpassed last year’s total, according to PitchBook data, coming in at $5.4 billion raised from 48 deals, a 50% deal value increase year-over-year to date. In 2025, $3.6 billion was netted from 76 deals.
“Consistent improvements in diffusion model quality have created professional-grade outputs,” said Eric Bellomo, senior emerging technology analyst at PitchBook, whose research includes consumer technologies. “A wave of startups has created momentum to sustain deal values in the years to follow.”
This wave includes companies like Odyssey, a developer of so-called world models that generate real-world simulations for uses like film and gaming, which disclosed on June 17 that it had raised a $310 million Series B at a $1.45 billion valuation. Also this month, AI music generation startup Suno announced a $400 million Series D at a $5.4 billion valuation.
A24 was founded in 2012 and quickly rose to prominence in Hollywood after its first original production, “Moonlight,” won the Academy Award for best picture in 2017. The studio has raised private capital from Stripes and Thrive Capital (an OpenAI backer), which invested in a $250 million round in 2024 that valued the company at $3.5 billion.
More typical deals involve studios investing in tech innovators. For example, Lionsgate, the studio behind the popular action series “John Wick,” recently took an equity stake in the AI video generation startup Runway after announcing a partnership in 2024. Another example is Disney, which entered into a deal with OpenAI back in December 2025 to license its characters for the startup’s AI video app Sora and pledged to invest $1 billion into the ChatGPT-maker. After shuttering Sora in March, Disney reportedly exited its deal with OpenAI, according to The Hollywood Reporter.
Another exception to this trend is Sequoia’s 2025 investment in indie movie streaming service Mubi—the firm led the company’s $100 million round that valued it at $1 billion. Most recently, Mubi is reportedly considering acquiring the Luca Guadagnino-directed movie about OpenAI CEO Sam Altman after Amazon dropped it, according to The Hollywood Reporter.
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This article originally appeared on PitchBook News
