Google in talks to invest ‘hundreds of millions’ into AI startup Character.AI
Google in talks to invest ‘hundreds of millions’ into AI startup Character.AI
Character.AI's chatbots, with various roles and tones to choose from, have appealed to users ages 18 to 24, who contributed about 60% of its website traffic.
Alphabet’s Google is in talks to invest in Character.AI, an artificial intelligence chatbot startup. Character.AI was founded by Noam Shazeer and Daniel De Freitas, two former employees at Google Brain, and the tech giant is expected to invest ‘hundreds of millions of dollars’ as Character.AI seeks to train models to keep up with user demands, 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.
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 a month for users who want to skip the virtual line to access a chatbot.
According to data from Similarweb, Character.AI's chatbots, with various roles and tones to choose from, have appealed to users ages 18 to 24, who contributed about 60% of its website traffic. 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.
The story, broken exclusively by Reuters, comes as the startup is also in talks to raise equity funding from venture capital investors, which could value the company at over $5 billion, sources said. In March, it raised $150 million in a funding round led by Andreessen Horowitz at $1 billion valuation.
Google has been investing in AI startups, including $2 billion for model maker Anthropic in the form of convertible notes, on top of its earlier equity investment. Google has previously invested or purchased Israeli companies such as Waze, BreezoMeter, Siemplify, and others.
