The first company to introduce AI avatars was IBM with its Watson AI technology in 2011, but it wasn’t until a few years later that the concept began to take shape.
The development of AI avatars, also known as digital humans or virtual assistants, has significantly progressed over the years. The AI Video Generator Market is projected to witness substantial growth, with Market Research Future estimating the market to expand from USD 5.39 billion in 2025 to USD 62.89 billion by 2034, reflecting a CAGR of 31.38% between 2025 and 2034.
In the CEE region, one company stands out as a key player in this transformation. Hungarian-founded, UK-based Colossyan is redefining video production by turning text into dynamic, AI-powered videos in minutes. With a library of over 150 lifelike AI avatars and voices, the platform enables users to create a wide range of content. Founded in 2020, Colossyan has experienced explosive growth, raising a $22M Series A round following a remarkable 600% year-over-year increase.
Following the release of The Recursive’s latest AI report, we sat down with Colossyan’s founder and CEO, Dominik Mate Kovacs, to discuss the company’s rapid growth, ethical AI considerations, and the evolving AI landscape in the CEE region.
Building AI from the ground up
With AI becoming mainstream following the launch of ChatGPT, Kovacs’ journey with AI precedes this wave of innovation. “I have a background in AI and complex science, starting my education in 2017. The initial company was founded in early 2019, and since then, we have been building our models,” he shares.
Colossyan’s text-to-video generator is at the core of their offering. But is the AI model homegrown or outsourced? “We are a deep tech company with a dedicated AI research team,” Kovacs explains. “Everything video-related is developed internally. For voice and imagery, we collaborate with third-party providers.”
Before launching Colossyan, Kovacs worked on deepfake prevention technology, an experience that now shapes the company’s ethical AI practices. “Through my early work, we saw the potential risks of AI-generated content. That’s why at Colossyan, we implement digital watermarking technology to ensure transparency and prevent misuse,” he notes. “We don’t allow any third parties to be recorded on our platform, which helps us protect users and maintain integrity.”
As Colossyan scales, expanding the AI research and engineering teams remains a priority.
“The engineering team works on integrating AI modules with the product itself, making it increasingly complex,” says Kovacs. “Our research strategy is modular—different researchers focus on specific areas. We’re adding more resources, but ultimately, we prioritize quality over quantity.”
AI trends impacting the CEE region
With the EU AI Act shaping the regulatory landscape, Kovacs acknowledges the need for compliance but remains optimistic. “Policy monitoring will inevitably impact companies, but we have a strong foundation when it comes to diversity and ethical AI. We believe we can be agile and compliant with these new policies.”
Looking ahead, Kovacs sees AI-powered knowledge management as a game-changer. “I believe knowledge assessment and AI-driven searchability within company knowledge bases will be a major trend. Having an AI system that makes corporate knowledge easily accessible will be transformative.” It is no wonder Colossyan has heavily invested into avatar realism and interactivity features to support the creation of active learning content.
As for the broader AI ecosystem in Central and Eastern Europe, Kovacs sees steady but measured progress. “The development is happening, though perhaps not as fast as in the Nordics or the UK. However, truly innovative and groundbreaking AI companies in the region can still secure funding and make an impact.”
Standing out in a competitive market
When asked about Colossyan’s milestones for the next year, Kovacs is clear on the company’s ambitions: “We want to be the best video experience platform for enterprises. Users will be able to create interactive video experiences from scratch, turning text into engaging content for internal learning and training. Our goal is to empower organizations with cutting-edge video tools.”
Since our last conversation in July 2024, Colossyan has continued to grow steadily. In early 2025, the company reported a 61% increase in revenue, strengthening its leadership in AI video innovation (prnewswire.com). Additionally, Colossyan was named one of G2’s fastest-growing software companies of 2025, a recognition of its expanding influence in workplace learning (learningnews.com).
“Our focus on innovation, our users, and our positioning in the market set us apart from competitors,” concludes Kovacs.
