Runway AI Inc. today announced that it has closed a $315 million funding round backed by Nvidia Corp. and AMD Ventures.

The lead investor was General Atlantic, which was also the biggest contributor to the company’s previous raise last April. That round reportedly valued Runway at over $3 billion. TechCrunch cited a source as saying that the company is now worth $5.3 billion.

Runway develops world models, algorithms that generate three-dimensional virtual environments based on user prompts. The company’s models are used by Shutterstock Inc., Robinhood Markets Inc. and other high-profile customers. As of last April, Runway reportedly sought to end 2025 with $300 million in annualized recurring revenue.

The company’s latest model made its debut in mid-December. GWM-1 enables engineers to create virtual environments for testing robots and training their onboard neural networks. A logistics warehouse operator, for example, could evaluate how a robotic arm interacts with different types of parcels. 

GWM-1 is also available in two other versions optimized for tasks such as 3D avatar generation. All three editions are based on Gen-4.5, a video generation model that debuted earlier in December. The algorithm nabbed the top spot on a ranking of AI video generators at the time of its launch.

Compared to its predecessor, Gen-4.5 is better at rendering physical phenomena such as momentum and fluid dynamics. However, it also has limitations. Objects sometimes randomly disappear in one frame and reappear in another, while changes are occasionally shown before the actions that caused them.

Runway stated that it will invest its newly raised funding in model development. It’s likely that addressing Gen-4.5’s rendering mistakes will be one of the company’s research priorities. In addition, it reportedly plans to hire more developers and go-to-market professionals.

The investment comes amid reports that one of Runway’s rivals is raising a new funding round of its own. World Labs Inc., a company led by AI pioneer Fei-Fei Li, is reportedly seeking up to $500 million at a valuation of $5 billion. The company offers a world model called Marble that developers can integrate into their applications.

Like Runway, World Labs counts Nvidia and AMD Ventures among its backers. Adobe Ventures has also invested in both startups. The software maker participated in Runway’s newly announced round alongside a number of large financial institutions. 

Both Runway and World Labs face competition from Google LLC. Last month, the search giant introduced a tool called Project Genie that enables users to generate 3D virtual environments with natural language prompts. It combines Google’s Nano Banana Pro image generator and Genie 3 world model.

Image: Runway