An AI video startup says revenue surged to $500 million in ARR as brands race to make ads with AI

Higgsfield, a San Francisco startup that makes tools for easily creating AI-generated videos, told Business Insider its revenue run rate has reached $500 million, up from $50 million last September. It doubled revenue this year, becoming one of the few AI companies to be cash-flow positive.

With that kind of growth, Higgsfield wants to be in the same conversation as Cursor and Lovable, two companies that have become shorthand for the rapid speed of AI software adoption.

AI coding platform Lovable said this month that it reached $500 million in ARR, the revenue a company expects to collect over a year. Fellow AI coding startup Cursor, which was just acquired by SpaceX for $60 billion, said last year it had surpassed $500 million in ARR and now has reportedly reached $4 billion in ARR.

Higgsfield is on pace to reach a $1 billion dollars in run rate as soon as the end of this year, Mahi de Silva, Higgsfield's chief strategy officer, told Business Insider.

He said the main driver of growth was making AI media creation easier for nontechnical users. The company is also betting heavily on AI agents and says it now works with 390 Fortune 500 companies. It says commercial advertising accounts for 70% of activity on the platform.

"The democratization of these tools is drawing a ton of people into the platform," he said.

Higgsfield has raised $150 million from investors, including Accel and Menlo Ventures, reaching a $1.3 billion valuation earlier this year. De Silva said the company's growth has attracted attention from VCs.

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"We were cashflow positive at the end of May, so we are quite the exception to most AI companies," he said. "We're not hemorrhaging money, but we are raising a Series B because of inbound interest."

"I'm a fan of the adage that when dinner is served in financing terms, you should sit down and eat," he added.

Higgsfield, founded in 2023, has been criticized for creating AI slop, or worse, videos that are obscene or racist.

The company's own survey found that nearly 30% of creators do not disclose their use of AI tools to clients.

De Silva pushed back on the idea that AI-generated media should be treated as inherently suspect, comparing it to the long-standing use of computer-generated imagery (CGI) in movies.

"When Scarlett Johansson appears in an Avengers movie, and she flies through the sky, there isn't a disclaimer that says, 'This movie was built with CGI. It wasn't real,'" he said. "For the last 20 years, we've lived with media that is digitally created and manipulated."

Asked whether OpenAI or Anthropic could threaten Higgsfield by offering their own image and video tools, de Silva argued that they have a more symbiotic relationship than a competitive one.

"We bring the best out of each model to our customers," he said.

De Silva also pointed to OpenAI's retreat from Sora as evidence that building a standalone AI video product is harder than just owning the underlying model.

"It's admirable that they realized their mistake and decided to focus their efforts elsewhere," he said.