AI film startup Utopai Studio has raised $60 million after being valued at $1 billion.

According to a recent report by The Information, a source close to Utopai said the company has already received follow-on investment offers valuing it at $2 billion to $3 billion.

Utopai is working on about 20 AI video projects, including 2 TV series and 3 feature-length films scheduled for theatrical release next year. It plans to release films in about 3,000 theaters in North America. Until now, most AI films have been screened in only 1 theater as technology demonstrations.

Utopai CEO Cecilia Shen (세실리아 셴), a former Google X employee, said, "There is nothing left if you only sell software in the entertainment industry. Good software does not guarantee a good film, either. Whether a good work comes out ultimately depends on how people use AI."

While Kling, Runway and Luma focus on training state-of-the-art video models, Utopai uses multiple external models. It also developed its own video model by modifying the open-source model Minimax H3. The model ranks No. 2 on AI benchmark firm Artificial Analysis' text-to-video leaderboard. Utopai is also selling software to external filmmakers while making films itself.

Utopai says AI tools can cut scene planning and computer graphics costs by 80 to 90 percent compared with conventional films.

Frontier AI models and personal AI agents are leading attention in the AI arena, but the race around video AI has recently been heating up gradually.

Hollywood heavyweight Jeffrey Katzenberg has moved to set up an AI film company with a former head of the OpenAI Sora app. Video AI company Higgsfield saw its valuation jump fourfold to $5.4 billion in August, and its annualised revenue exceeded $1 billion in September. China's Kling AI recently received investment of nearly $3 billion at a $15 billion valuation.