Shutterstock are joining forces in a merger valued at around $3.7 billion, the companies announced on Tuesday. The merger will allow the companies to expand their stock photo libraries as they face increasing competition from AI-powered image creation tools.

Getty Images is buying Shutterstock to create a $3.7 billion visual content company. The merger comes at a time when companies that use still images are facing increased competition from images generated by artificial intelligence.

Getty Images is the bigger company of the two, and its shareholders will own approximately 54.7% of the new entity, while Shutterstock shareholders will own 45.3%. Getty Images also owns the iStock and Unsplash brands. The company will simply be called Getty Images.

In total, Getty expects to pay $331 million plus 319.4 million shares of its stock to acquire Shutterstock. At today's share price, that works out to a valuation of about $1.35 billion on Shutterstock, or about 7% more than what Shutterstock costs after today's price spike.

Getty Images and Shutterstock will merge into one company valued at $3.7 billion in a deal that aims to take on competition from AI, the companies announced on Tuesday. The new premier visual content company will be called Getty Images Holdings, Inc. and at close, Getty Images’s CEO, Craig Peters, will serve as CEO of the combined company.

The giant commercial photo and video providers are grappling with the emergence of artificial intelligence tools that have flooded the internet with AI-created images.

Shares in Getty Images and Shutterstock surged after the image companies agreed to merge, creating a group worth about $3.7 billion including debt. Getty stock stood about 49% higher in recent premarket trading.

Getty Images and Shutterstock agreed to a merger, creating a more formidable competitor for Adobe as generative AI shifts the landscape.

Getty Images Holdings Inc. is exploring a merger with rival Shutterstock Inc., according to people familiar with the matter.

Shutterstock, creating a $3.7 billion stock image giant. While the deal is expected to bolster the companies' position in the AI era, it could also draw antitrust scrutiny. The newly formed entity is called Holdings Inc.

Visual content companies Shutterstock and Getty Images will join to become a 3.7 billion dollars (£3 billion) visual content company. The companies said on Tuesday that they have complementary portfolios, and the transaction creates a broader set of visual content products across still imagery, video, music, 3D and other asset types.