With the five-day power struggle at OpenAI ending with Sam Altman's return to power, Adobe is boosting its capabilities in generative AI. According to the Financial Times, the content software giant has issued an internal memo announcing the acquisition of Rephrase, a text-to-video company based in California.

While the cost of the deal has not been disclosed, it is expected to strengthen Adobe's Creative Cloud suite of products, which has gradually gained upgrades in generative AI over the past year. In particular, Rephrase will help the company empower its customers to generate professional-grade videos using only text.

Rephrase CEO Ashray Malhotra announced the deal in a LinkedIn post, but only mentioned that the company had been acquired by a "leading tech giant" without mentioning Adobe's name. When asked to comment, he said he was not authorized to share more information at this stage.

What does Rephrase bring?

Founded in 2019 by Malhotra, Nisheeth Lahoti, and Shivam Mangla, Rephrase provides a platform called Rephrase Studio that allows businesses to create professional-looking videos with avatars in minutes. All users have to do is select a video template, choose an avatar with a specific voice preference, and add the content they want to convey.

Once users click the render button on Rephrase, the studio automatically merges all elements, synchronizing the script with the avatar. They can make the content more natural through additional customization options, including adjusting the avatar's size, changing the background, adding pauses between words, or adding custom audio.

Over the past four years, the company has attracted over 50,000 customers and raised nearly $14 million from multiple investors, including Red Ventures and Lightspeed India. When the company started, its unique selling point was helping businesses and influencers create customized avatars for personalized business videos, such as those featuring their brand ambassadors or themselves.

Now, with this acquisition, the capabilities of these products and most members of the Rephrase team will transition to Adobe to serve the company in building generative AI videos.

Ashley Still, Senior Vice President and General Manager of Creative Cloud at Adobe, wrote in the aforementioned internal memo, "The Rephrase.ai team's expertise in generative AI video and audio technology, as well as their experience in building text-to-video generator tools, will expand our generative video capabilities and enable us to deliver more value to our customers faster—all within our industry-leading creative applications."

When contacted by VentureBeat for inquiries, an Adobe spokesperson declined to comment on the development and how Rephrase's tools complement its product stack.

The spokesperson said, "Adobe has a strong track record of accelerating growth through organic and inorganic innovation. We are always looking for new talent and technology that supports our strategy and creates more value for our stakeholders."

Adobe's optimism towards AI

In recent months, Adobe has been pushing the boundaries of generative AI, launching multiple product updates. First, it introduced Firefly, an AI engine for image generation, and integrated it into Creative Cloud products like Photoshop, allowing users to add or remove objects in images by simply describing the changes in text.

Then, at last month's annual Max conference, the company showcased several experimental generative AI-driven video intelligence, including the ability to upgrade videos, change their textures and objects through text prompts, or composite subjects and scenes from two different videos. It is currently unclear whether these features will make it into future releases, but Rephrase's avatar-based capabilities are certainly a good candidate to be included.

Malhotra noted in his post, "This is early days for generative AI and early days for everything we plan to build in generative AI. Never been more excited to get back to building. We are thrilled to announce the launch of our new project."

For audio and video-related work, Adobe Creative Cloud currently offers six major products: Premiere Pro, After Effects, Audition, Character Animator, Animate, and Media Encoder. It is used by millions of professionals and enthusiasts to create, edit, and share digital content, and it is also a source of countless memes, parodies, and viral art that shape online communities and trends.