Media and document solutions provider Adobe (NASDAQ:ADBE) is buying up videos for nearly $3 per minute to create a text-to-video generator that can go head-to-head against Microsoft (NASDAQ:MSFT)-backed OpenAI’s Sora.
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Playing Catch-up
Over the past few weeks, OpenAI’s Sora, which can whip up jaw-dropping videos based on only a text prompt, has taken the world by storm. Adobe is now playing catch-up amid this rising competition.
Adobe is sourcing videos to train its models. According to Bloomberg, the company is paying its network of photographers and artists to procure a variety of videos. So far, Adobe has largely focused its efforts on enhancing its existing offerings, such as Photoshop and Illustrator with new generative AI features. It has also introduced tools that can generate images from text prompts.
Adobe plans to discuss its latest efforts later this year.
Concerns Remain
Meanwhile, investors remain concerned about a potential disruption for well-entrenched players such as Adobe. Shares of the company have plunged by nearly 20% so far this year. At the same time, Adobe paying for content to train its models points to the vast troves of data needed to create sophisticated AI tools. In recent times, OpenAI itself has faced concerns regarding how it sources data to train AI models.
What Is the Target Price for ADBE?
Overall, the Street has a Moderate Buy consensus rating on Adobe. Furthermore, the average ADBE price target of $620.63 points to a nearly 29% potential upside in the stock.
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