Higgsfield has raised $400 million at a $5.4 billion valuation, with Goldman Sachs, Intel, and DST Global as new backers. The AI video startup said the round will fund enterprise expansion and computing power.

The deal follows an $80 million raise in January that valued the company at $1.3 billion. That marks a four-fold jump in eight months. Founder Alex Mashrabov confirmed the terms to the Financial Times.

Enterprise Demand Drives the Valuation Jump

Higgsfield was founded in 2023 by former Snap executive Alex Mashrabov. The platform turns text prompts into marketing videos for businesses. It launched publicly in 2025 and now serves more than 30 million users across 238 countries.

Annualized revenue reached $700 million in August, up from $20 million a year earlier, according to the company. Business customers now generate most of that revenue. That marks a sharp shift from January, when they made up less than a quarter of sales.

That enterprise pivot mirrors a broader pattern across AI cloud providers like Nebius. Usage-backed revenue has drawn premium valuations from growth investors this year.

“At Snapchat, the face filters I built were primarily used by teenagers for entertainment. At Higgsfield, we are transforming how larger businesses run marketing campaigns,” Mashrabov said.

Mashrabov said brands including Dollar Shave Club now use Higgsfield to produce several videos a day, not one campaign asset. That reduces reliance on outside creative agencies.

AI Video’s Cost Problem Sank a Bigger Rival

Higgsfield’s rise stands in sharp contrast to the retreat seen elsewhere in AI video, after OpenAI shut down its Sora video app in 2026 following just $2.1 million in lifetime revenue against heavy cash burn.

OpenAI discontinued the app in April, then confirmed it would close the underlying API in September. The company cited runaway compute costs against just a small fraction of that in lifetime revenue.

Reports pegged Sora’s daily inference costs at an estimated $15 million, far outpacing the app’s total revenue. Generating video demands far more computing power than producing text or images, making costs difficult to control. Other video-generation rivals have also pulled back this year as the same cost pressure squeezes the sector.

Goldman and Intel Join a Crowded Field

Goldman Sachs invested through its Equity Growth fund. Intel’s own AI-linked bets have grown this year as chipmakers chase stakes beyond core hardware sales. Other backers include Tribe Capital, Fifth Wall, and NTT DOCOMO Ventures.

Goldman estimates the global creator economy could grow from $250 billion in 2023 to $480 billion by 2027. Digital ad spending is forecast to reach $1.1 trillion by 2030, according to The Business Research Company.

Mashrabov said scarce computing power was a driving reason behind the raise. The new funding will let Higgsfield reserve compute capacity as it builds out enterprise products and security.

Whether Higgsfield can sustain its pace as larger labs push into video generation remains the next test for its valuation.

Source: BeInCrypto