Google is rehiring talented AI specialists who left the company to start their own startup

One of the researchers behind the famous paper that sparked a breakthrough in the current era of AI is returning to Google. Another former top Google engineer has also returned to his former employer. The pair left the company two years ago to start their own AI startup, Character.AI.

The startup Character.AI, which has received a $150 million (over €136 million) injection of capital and a $1 billion valuation, has allowed customers to build their own chatbots for very specific tasks. In addition to the two former Google employees, an undisclosed number of Character.AI employees are also moving to Google. The tech giant has also struck a deal with the startup for non-exclusive use of the LLMs it has developed.

Although Character.AI will remain alive, Google is buying out investors for $88 a share, more than 2.5 times the value of the shares from the previous round of investment. Character.AI claims that the platform attracts 100 million visitors a month. It is reportedly already preparing for another round of investment, aiming for a valuation of $5 billion. Just last year, there was talk that Google could invest millions of dollars in Character.AI.

Now that Google has swallowed the startup’s head, the question is whether that growth ambition is still realistic. Character.AI has already announced that it will now use not only its LLMs, but also other parties.

Noam Shazeer, one of the authors of the famous 2017 paper “Attention is All You Need,” was CEO of Character.AI. He has now joined DeepMind, Google’s AI division. Daniel De Freitas, another top talent returning to Google, was “president” of Character.AI. Exactly what their new roles will be has not been disclosed.

Absorbing AI Startups: A Proven Method

Google’s approach is somewhat similar to what Microsoft did when it hired Mustafa Suleyman earlier this year. The former CEO of startup Inflection AI now leads a newly formed AI division at Microsoft focused on consumer applications. That includes teams for the Edge browser, Bing search engine, and long-promised AI startup Copilot.

Suleyman co-founded DeepMind and co-chaired Inflection AI when Microsoft acquired it. At the same time, the tech giant acquired virtually the entire board and workforce of Inflection AI. As a result, the company was effectively acquired without an official takeover or sale. In addition to Suleyman, Microsoft hired Karén Simonyan, also a co-founder of Inflection AI. He now serves as the chief scientist of the company’s consumer AI division.

Microsoft compensated Inflection AI, which is now relatively short on human capital, by paying $620 million for a software license and LLM. The company also paid $30 million to settle any legal ramifications of the unofficial acquisition.

Such deals, in which a company is not officially acquired but rather key employees and assets are bought out in offers that are too good to refuse, often result in antitrust scrutiny in the U.S. and Europe.

Read also: Microsoft understands that AI is more than just the Copilot button