Key facts
- Blackstone is in talks to lead a funding round for AI firm Factory.
- The deal is expected to value Factory at over $3.5 billion.
- Factory creates AI-driven 'droids' that automate software coding.
- Nvidia and JP Morgan are among Factory's existing investors.
- Blackstone previously invested in Factory's Series C round at a $1.5 billion valuation.
Blackstone is reportedly nearing a deal to invest in AI firm Factory, a San Francisco-based startup that develops AI-driven 'droids' to automate software coding. The investment, if finalized, would value Factory at over $3.5 billion, underscoring the rapid rise in valuations within the artificial intelligence sector.
Factory, founded in 2023 by former Princeton students Matan Grinberg and Eno Reyes, aims to compete with companies like Anthropic. Its AI 'droids' are used by major corporations including Morgan Stanley, EY, and Nvidia, which is also an investor in the company. Factory has experienced rapid growth, reportedly doubling its revenue each month in the six months leading up to April.
This potential investment would represent Blackstone's continued aggressive push into the AI industry. The investment giant, which has been actively investing in AI firms and digital infrastructure, previously participated in Factory's Series C funding round in April, which valued the company at $1.5 billion. That round also included investments from firms like Sequoia Capital and Khosla Ventures. Factory's Series B round in September valued it at $300 million.
Blackstone's operating chief, Rodney Zemmel, has identified companies using AI agents for corporate automation as a key focus area. The firm is also investing heavily in the 'picks and shovels' of the AI boom, such as data centers, and has announced significant investments in Japanese data centers and a new data infrastructure company with Google.