Google Said to be In Talks to Invest in AI Chatbot Startup Character.AI

Character.AI already uses Google's cloud services and Tensor Processing Units (TPUs) to train models.

Google Said to be In Talks to Invest in AI Chatbot Startup Character.AI

Photo Credit: Character.AI

Character.AI features virtual AI chatbots of celebrities like Billie Eilish or anime characters

  • Google’s investment could amount to hundreds of millions of dollars
  • Google has already invested in AI startup Anthropic
  • Character.AI was founded by former Google employees

Alphabet's Google is in talks to invest hundreds of millions of dollars in Character.AI, as the fast-growing artificial intelligence chatbot startup seeks capital to train models and keep up with user demand, two sources briefed on the matter told Reuters.

The investment, which could be structured as convertible notes, according to a third source, will deepen the existing partnership Character.AI already has with Google, in which it uses Google's cloud services and Tensor Processing Units (TPUs) to train models.

Google and Character AI did not respond to requests for comment.

Founded by former Google employees Noam Shazeer and Daniel De Freitas, Character.AI allows people to chat with virtual versions of celebrities like Billie Eilish or anime characters, while creating their own chatbots and AI assistants. It is free to use, but offers subscription model that charges $9.99 (roughly Rs. 831) a month for users who want to skip the virtual line to access a chatbot.

Character.AI's chatbots, with various roles and tones to choose from, have appealed to users ages 18 to 24, who contributed about 60 percent of its website traffic, according to data from Similarweb. The demographic is helping the company position itself as the purveyor of more fun personal AI companions, compared to other AI chatbots from OpenAI's ChatGPT and Google's Bard.

The company previously said its website had attracted 100 million monthly visits in the first six months since its launch.

Character.AI is also in talks to raise equity funding from venture capital investors, which could value the company at over $5 billion (roughly Rs. 41,605 crore), sources said. In March, it raised $150 million (roughly Rs. 1,248 crore) in a funding round led by Andreessen Horowitz at $1 billion (roughly Rs. 8,321 crore) valuation.

The talks with Google are ongoing and terms of the deal could change, said the sources, who requested anonymity as the discussions are private.

Google has been investing in AI startups, including $2 billion (roughly Rs. 16,642 crore) for model maker Anthropic in the form of convertible notes, on top of its earlier equity investment. Anthropic uses Google's cloud services as well as its latest version of TPUs.

That is part of a recent trend in which big tech cloud services providers are striking deals with AI companies to entice them to use certain cloud or hardware in the computer-intensive race to build models and serve consumers, including Microsoft investments in OpenAI and Google and Amazon's bets on Anthropic.

US Federal Trade Commission chair Lina Khan said at an event in San Francisco last week that the agency is looking into cloud provider investments in AI startups to examine any anti-competitive behaviors.

© Thomson Reuters 2023

Google I/O 2023 saw the search giant repeatedly tell us that it cares about AI, alongside the launch of its first foldable phone and Pixel-branded tablet. This year, the company is going to supercharge its apps, services, and Android operating system with AI technology. We discuss this and more on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
Affiliate links may be automatically generated - see our ethics statement for details.

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Further reading: Google, Character AI, Alphabet, AI
Honor 100 Series Launch Date Set for November 23; Said to Offer Snapdragon 8 Gen 2 SoC
Musk-Inspired Memecoin ‘Grok’ Sees Quick Rise and Fall Amid Scam Suspicions: Details
Share on Facebook Gadgets360 Twitter Share Tweet Snapchat Share Reddit Comment google-newsGoogle News


Follow Us
© Copyright Red Pixels Ventures Limited 2024. All rights reserved.
Trending Products »
Latest Tech News »