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Google in Advanced Talks to Invest in AI Startup Character.AI

TL;DR

  • Google in talks to invest in AI startup Character.AI, aiming to support AI model training and user demand.
  • Character.AI offers personalized chatbots, attracting a young user base, with 100 million monthly visits in six months.
  • FTC scrutinizes cloud provider investments in AI startups, emphasizing the importance of regulatory oversight.

Alphabet’s Google is reportedly in discussions to invest hundreds of millions of dollars in Character.AI, an AI chatbot startup founded by former Google employees Noam Shazeer and Daniel De Freitas. The investment aims to support Character.AI in training AI models and meeting the growing demand from users. This potential investment could further strengthen the existing partnership between Character.AI and Google, leveraging Google’s cloud services and Tensor Processing Units (TPUs) for model training.

The expanding world of character.AI

Character.AI is an innovative startup that allows users to engage in conversations with virtual versions of celebrities such as Billie Eilish and anime characters. Additionally, it enables users to create their own chatbots and AI assistants. The service is free to use, but it offers a subscription model costing $9.99 a month for users who want expedited access to their preferred chatbots.

With various chatbots offering a range of roles and tones, Character.AI has resonated particularly well with users aged 18 to 24, who account for approximately 60% of its website traffic, as reported by Similarweb data. This demographic positioning sets Character.AI apart as a provider of more entertaining and personalized AI companions compared to other AI chatbots like OpenAI’s ChatGPT and Google’s Bard.

Impressive user engagement

Since its launch, Character.AI’s website has seen remarkable success, attracting 100 million monthly visits within the first six months. This rapid growth is a testament to the platform’s appeal and the growing interest in AI-driven conversational experiences.

Venture capital interest in character.AI

In addition to Google’s potential investment, Character.AI is also in discussions to secure equity funding from venture capital investors. These discussions could potentially value the company at over $5 billion, according to insider sources. In March, the startup successfully raised $150 million in a funding round led by Andreessen Horowitz, achieving a valuation of $1 billion.

The ongoing discussions with Google regarding the investment are subject to change, as sources emphasize that the terms of the deal are still being negotiated.

Google’s expanding investment in AI startups

Google’s interest in Character.AI aligns with its broader strategy of investing in AI startups. In a previous instance, Google committed $2 billion in the form of convertible notes to Anthropic, a model maker. Anthropic also utilizes Google’s cloud services and the latest TPUs, showcasing the tech giant’s continued commitment to the advancement of AI technologies.

This trend of big tech cloud service providers partnering with AI companies underscores the competitive nature of the race to build and deploy advanced AI models to serve consumers. Similar moves have been made by Microsoft with its investments in OpenAI and by Google and Amazon in Anthropic.

FTC’s scrutiny on cloud provider investments

It is worth noting that the U.S. Federal Trade Commission (FTC) has expressed interest in investigating cloud provider investments in AI startups for potential anti-competitive behavior. FTC chair Lina Khan recently mentioned this concern at an event in San Francisco, emphasizing the need for regulatory oversight in this rapidly evolving space.

As the discussions between Google and Character.AI continue, all eyes will be on the outcome of this potential investment and its implications for the future of AI chatbots and conversational AI technologies.

The news of Google’s potential investment in Character.AI reflects the tech giant’s ongoing commitment to advancing artificial intelligence technologies. Character.AI’s unique approach to AI chatbots and its impressive user engagement have attracted significant attention and investment interest. As discussions progress, the outcome of this potential investment will likely have far-reaching implications for the AI industry and the development of personalized conversational AI experiences. Additionally, the FTC’s scrutiny of cloud provider investments in AI startups underscores the need for continued regulatory oversight in this dynamic and competitive landscape.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Editah Patrick

Editah is a versatile fintech analyst with a deep understanding of blockchain domains. As much as technology fascinates her, she finds the intersection of both technology and finance mind-blowing. Her particular interest in digital wallets and blockchain aids her audience.

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