AI startup Jasper acquires image generator Clipdrop from Stability AI

By Krystal Hu

(Reuters) -U.S. writing assistant startup Jasper has acquired Clipdrop, an artificial intelligence-powered photo application from Stability AI, the company told Reuters, as Jasper expands its offerings beyond text editing to photos.

The deal, the terms of which were not disclosed, marks a reversal in strategy for Stability AI, a London-based startup known for its image generation AI model, which acquired Clipdrop under a year ago.

In an emailed statement, Emad Mostaque, CEO at Stability AI, said the deal will allow the company to continue to focus on developing "cutting-edge open models".

Founded in July 2020, Paris-based Clipdrop uses open source AI models to allow users to generate and edit photos. It had raised seed investment from Air Street Capital before being sold to Stability AI in March 2023 for an undisclosed amount. At the time, Clipdrop said it had more than 15 million users.

"This is a great way for us to not only expand the product capabilities, expand our AI talent, but also expand our footprint into Europe," said Timothy Young, Jasper's CEO.

Jasper and Stability AI are among users of and investors in generative AI, an area populated by OpenAI's ChatGPT.

Both companies have raised over $100 million from venture investors at billion dollar valuations, and are now trying to prove they can sustain the growth in the fast-moving race with other startups and big tech companies.

Jasper, known for its AI-based writing tool, has seen layoffs and CEO changes as it tries to focus on serving enterprises, instead of consumers, in the past year. It plans to offer Clipdrop through its platform, while keeping it available as a standalone product.

(Reporting by Krystal Hu in New York; editing by Miral Fahmy, Kirsten Donovan)