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Google in Discussions to Invest in AI Startup Character.AI

Updated: Jan 8

Google, the tech giant, is reportedly in talks to invest a substantial amount of money in Character.AI, an artificial intelligence chatbot startup.

Credit: Shutterstock

The investment aims to provide capital for training models and meeting the increasing demand from users.

According to sources familiar with the matter, the investment could be structured as convertible notes. The deal would further strengthen the existing partnership between Google and Character.AI, as the startup already utilises Google's cloud services and Tensor Processing Units (TPUs) for training its models.

Character.AI, founded by former Google employees Noam Shazeer and Daniel De Freitas, offers users the ability to chat with virtual versions of celebrities and anime characters, as well as create their own chatbots and AI assistants. While the platform is free to use, it also offers a subscription model for users who want to skip the virtual line and gain immediate access to a chatbot. The company has gained popularity among users aged 18 to 24, who contribute to about 60% of its website traffic.

The talks between Google and Character.AI are ongoing and the terms of the deal could still change. Both companies have declined to comment on the matter.

In addition to the potential investment from Google, Character.AI is also in discussions with venture capital investors to raise equity funding. These discussions could value the startup at over $5 billion. In a previous funding round led by Andreessen Horowitz, Character.AI raised $150 million at a valuation of $1 billion.

Google's interest in investing in AI startups aligns with the trend of big tech companies forming partnerships with AI companies to leverage their cloud services and hardware for building models and serving consumers. This includes Microsoft's investments in OpenAI and Google and Amazon's bets on Anthropic.

The potential investment from Google comes as Character.AI aims to further expand its offerings and capitalise on the growing demand for personalised AI companions. The company's unique approach to chatbots and AI assistants has resonated with users, positioning it as a provider of more entertaining and fun experiences compared to other AI chatbot platforms.

  • Google is in discussions to invest in Character.AI, an AI chatbot startup.

  • The investment would provide capital for training models and meeting user demand.

  • Character.AI allows users to chat with virtual celebrities and create their own chatbots.


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