Hollywood, meet your newest generative artificial intelligence startup.
As a flood of generative AI companies make their way to the film and entertainment industry in Los Angeles, venture dollars are following suit. Arcana Labs emerged from stealth in mid-April with $5.5 million in funding, which will be used in part to launch its digital studio, Arcana AI. The round was led by Pennsylvania-based SEMCAP’s AI arm, which invests in AI companies that are targeting the business-to-business sector.
Arcana Labs was created by Millenium Media president Jonathan Yunger, who was a producer on “Hellboy: The Crooked Man” and “The Offering,” and Hank Hoffman (who wrote and produced “The Offering”). The pair experimented with Midjourney, an AI-generated image platform, and instantly became obsessed.
“That obsession quickly turned into frustration,” Yunger said. “To get your image, you had to roll and reroll and reroll and it would literally take you hours.”
Arcana AI allows creators to use several generative AI models – whether it be Stable Diffusion, DALL·E or Arcana’s proprietary models, instead of having to jump between several different platforms, each with their own subscription, in an already expansive and expensive production workflow.
“We realized in people’s workflows, they have all these subscriptions to Magnific, then Topaz, then you’re in Midjourney, then you go on to Runway,” Yunger said. “First of all, it’s really expensive. Second of all, that workflow is tough because you’re popping from platform to platform.”
Cementing its place in Hollywood
Arcana Labs connected with SEMCAP through SEMCAP’s production company, Primary Source, which is focused on independent documentaries and docu-series. The company used Arcana Labs to diagnose an AI issue it was having while producing a series on George Washington.
“In a very short period, leveraging Arcana, we were able to create realistic scenery and visually compelling content, more expeditiously and inexpensively than we had ever been able to do before,” SEMCAP cofounder and co-chief innovation officer Walter Buckley said in a statement. “Prior to leveraging the platform, creating a historically accurate image took up to 300 tries, and yielded very mediocre results.”
Arcana Labs is currently working on a short film (“Well, I would call it a 30-minute episode of television,” Yunger said) and has more than 20 other films in development. But readers may perhaps know it as the company that generated an AI video showing the war-devastated Gaza Strip as a seaside beach resort, showing sunny skies, palm trees and an Elon Musk-reminiscent tourist eating out of a bread bowl. President Donald Trump reposted the video on Truth Social.
More than 100,000 people are using the platform, according to Arcana Labs. The company has also made several inroads in Hollywood institutions – studios and streamers are testing the platform (though Arcana Labs declined to name which, citing nondisclosure agreements). Visual effects departments and production designers are incorporating the platform into their workflows. Arcana Labs got a contract with the Screen Actors Guild-American Federation of Television and Radio Artists, the union guild leading appropriate uses of AI for its workers.
“We’re doing that on purpose to show, look, we can all work together. Don’t be scared,” Yunger said. “We got to get rid of AI fear and make way for AI excitement because it’s not going anywhere. And if people don’t get hip to these tools, they’re going to get left behind.”
