Google signs Character AI deal, hires DeepMind executives

AI avatar company Character AI is closing in on Google. The startup announced in a blog post today that it will license its large language model (LLM) technology to Google in exchange for “increased funding for Character.AI to continue its growth and focus on creating personalized AI products for users around the world.”

In addition, Character AI’s founding team, Noam Shazeer and Daniel De Freitas, along with several members of the research team, will join Google. The company said most of its employees will remain at Character AI, while its general counsel, Dominic Perella, will become interim CEO.

“As we enter this next phase of growth, we will continue to invest in our post-learning capabilities, with the flexibility to leverage our own or externally available LLMs. We are excited about the future of Character.AI and are committed to serving our users with innovative new products,” the company said in a blog post.

What is Character Artificial Intelligence?

Character AI, founded in 2022, lets people create AI avatars of themselves or other characters. The company reached a $1 billion valuation in March 2023 after a $150 million funding round led by Andreessen Horowitz.

The company previously built its own models, opting for an end-to-end approach that included pre-training, training, and deployment to create AI avatars.

However, he said in his blog post that “the landscape has changed” in the past few years, with more off-the-shelf, pre-trained models readily available. By leveraging Google’s LLM, Character AI said it could focus on post-training models and creating new products for its users.

Indeed, reports emerged earlier this week that Meta was discontinuing development of its celebrity artificial intelligence (AI) chatbots, which were widely seen as rivals to Character AI, after their user interest and engagement dropped noticeably.

Google said VentureBeat that Shazeer, a former software engineer at Google, will join the DeepMind team.

“I’m incredibly excited to be returning to Google and working with the Google DeepMind team. I’m proud of everything we’ve built at Character.AI over the past three years,” Shazeer said in an email to News “I am confident that the funds from Google’s non-exclusive licensing agreement, along with the excellent Character.AI team, will position Character.AI for continued success in the future.”

Another deal in the AI ​​space

Google and Character AI did not provide further details about the deal, and neither company confirmed whether the deal would be considered an acquisition.

Other big tech companies have essentially bought companies through “acquisitions,” when the management team and large startup groups are hired by a large company. Sources close to the deal said VentureBeat it was neither an acquisition nor a takeover

For example, Microsoft hired the co-founders of AI startup Inflection, which many people said was a way to avoid regulatory concerns about the acquisition.

This is not the first time Character AI has been involved in potential acquisition talks. information reported that Elon Musk’s artificial intelligence startup xAI was considering buying Character AI, though Musk later denied the reports on his social media site X (formerly Twitter).