AI video startup Runway’s new fundraising round signals a change in orientation toward a type of foundation model that is growing in popularity in the physical AI market for its realism and accuracy.
The new funding boosted the AI startup’s valuation to $5.3B, up $2B from a year ago.
The funding will help 2018 startups focus on the World Model, a type of foundation model that is proving popular among enterprises for the predictability it provides in a variety of settings. World models are trained to learn how the physical world works and predict physics, cause-and-effect, and spatial dynamics.
The New York-based vendor plans to use the capital to pre-train next-generation world models, a shift from its focus since releasing video models. Gen-1 video-to-video model In 2023.
Redirection of the runway highlights its growing importance world model In the enterprise AI market. Because world models are able to simulate the physical world in a virtual environment, they are used in industries such as health care, autonomous vehicles, and robotics.
The sector has seen significant growth, and Runway competes with Google and Nvidia, which also have world models. In January 2025, Nvidia introduced Cosmos World Foundation Launched the Cosmos WFM platform to produce “physics-aware” videos to model and train physical AI and robots. Google DeepMind releases its general-purpose world model, Genie 3, last summer. Runway introduced GWM-1, a general-world model for interactive environments, robotics, and digital embodiment, in December.
an expected physical world
The growth in use of global models stems from their ability to provide greater predictions about what will happen in the world. physical world.
“As the level of accuracy increases with the world model, you can almost be assured that whatever is trained with that model can work safely in the real world,” said analyst Lian Jae Su of Omdia, a division of Informa TechTarget. “This has a lot of implications from a functional, security and compliance standpoint.”
“Being able to offer that level of accurate representation of the physical world is critically important to enterprises,” Su added.
He said that although Runway has until now been a video generation vendor focused on enterprises, the fact that it sees an opportunity in the global model means its customers demand it.
“As we move forward, we will probably see a lot more cross-pollination between the physical and virtual worlds,” Su said. For example, there may be opportunities to embed spatial computing In other types of technology, he said.
“Due to advances in AI, with a lower barrier to entry for enterprises, we will see a lot more enterprises trying this technology,” Su said. “This opens up new possibilities in the enterprise sector.”
General Atlantic led the funding round. Nvidia, Adobe Ventures, AllianceBernstein, AMD Ventures and Fidelity Management & Research Company participated.
