Google is currently in advanced discussions to invest a significant sum in Character.AI, an artificial intelligence chatbot startup rapidly gaining traction. This move could see Google injecting hundreds of millions into the startup, further solidifying their existing relationship. Character.AI, renowned for its virtual celebrity and anime character chats, was established by ex-Google employees Noam Shazeer and Daniel De Freitas.
Offering a blend of free and paid services, with its premium offering priced at $9.99 monthly, Character.AI allows for quicker access to its unique chatbot experience. The investment, potentially in convertible notes, enhances the startup’s use of Google’s cloud and Tensor Processing Units for AI model training.
The deal is part of a larger trend of big tech firms like Google investing in AI startups. Character.AI’s valuation soared to $1 billion following a $150 million funding round led by Andreessen Horowitz in March. Now, as it negotiates additional equity funding from venture capitalists, its valuation could exceed $5 billion.
This investment trend includes significant deals like Google’s $2 billion investment in Anthropic and Microsoft’s investment in OpenAI, reflecting a strategy of tying AI startups to specific cloud or hardware services. These developments are under scrutiny by regulatory authorities like the U.S. Federal Trade Commission for potential anti-competitive practices.
