Apps & Consumer
BuzzFeed pivots to AI apps amid financial struggles
BuzzFeed has launched an AI-focused spin-off, Branch Office, as the media company attempts to address significant financial liquidity challenges and a $57.3 million net loss.
BuzzFeed, the U.S.-based media company, is attempting to reinvent itself for the AI era by launching an AI-focused spin-off called Branch Office. Introduced at the SXSW conference—an annual tech and media event in Austin, Texas—the new venture will explore artificial intelligence in consumer-facing applications. The spin-off debuted three initial products: BF Island, a group chat platform featuring AI photo editing; Conjure, a daily photo app; and Quiz Party, a social app for taking BuzzFeed quizzes with friends.
The strategic pivot comes as the U.S.-based company faces severe financial pressure. In recent public disclosures, BuzzFeed acknowledged it has “substantial doubt” about its ability to continue as a business and is actively engaging in strategic conversations focused on fixing its liquidity challenges. The company reported a net loss of $57.3 million last year, prompting a strategic shift toward its studio intellectual property and new AI-driven applications.
Branch Office represents a project that BuzzFeed has been developing quietly. Peretti stated that the company had been working on the project in secret for over a year, drawing lessons from the main BuzzFeed platform regarding upcoming AI formats. He added that the technology serves as a tool to connect people and build communities around shared culture and taste. According to Jonah Peretti, co-founder and CEO of BuzzFeed, “In a way, software is the new content,” as the company seeks to transition from traditional media to interactive applications.
However, the presentation at SXSW was met with skepticism from the audience, raising questions about the apps’ long-term utility and user retention. Bill Shouldis, a director of product at BuzzFeed and the founder of Branch Office, demonstrated BF Island and Conjure. BF Island relies on an editorial library of online trends and memes to prompt AI photo creation, while Conjure prompts users to take daily photos of their surroundings. The format of Conjure drew immediate comparisons to BeReal, a once-popular daily photo app that struggled with retention before ultimately being acquired by Voodoo.
When questioned about how Conjure would avoid similar retention issues, Shouldis noted that the app would evolve to include different features over time. He mentioned plans to integrate video, audio, and prototyping with Claude Code—an AI prototyping tool—to build community engagement.
Why it matters
BuzzFeed is attempting a high-stakes pivot to AI-driven software to stabilize its business, but the company faces significant skepticism from both investors and users regarding whether these tools can generate sustainable revenue or engagement.