Discord’s Midjourney Deal Could Supercharge Its Revenue

Welcome back!

For months I’d heard murmurings about Midjourney, a little artificial intelligence image generator company that had grown to almost 15 million users and hundreds of millions in revenue without any venture funding. I found that the company is also profitable, a major feat for a bootstrapped startup. (Read my profile of the startup and its eclectic founder, David Holz.) 

I also discovered that Discord, a gaming chat valued at $15 billion in 2021, had established a lucrative relationship with the startup. Midjourney is built on Discord, meaning subscribers type prompts into a Discord server, or chat group, then wait for an image to appear. Using Discord, they can discuss their art and build relationships with fellow AI enthusiasts. In exchange for those social tools and the additional resources Discord has provided to help it expand, Discord takes a slice of Midjourney’s revenue. That suggests Discord has cooked up its own version of the platform fees companies like Apple charge, earning them billions in revenue. (Apple charges up to 30% on in-app purchases.)