Alphabet’s Google is in talks to invest in Character.AI, an artificial intelligence chatbot startup. Character.AI was founded by Noam Shazeer and Daniel De Freitas, two former Google Brain employees, and the tech giant is expected to invest “hundreds of millions of dollars” as Character.AI seeks to train models to meet the user requests. two sources briefed on the matter told Reuters.
The investment, which could be structured as convertible notes, according to a third source, will deepen Character.AI’s existing partnership with Google, in which it uses Google’s cloud services and tensor processing units (TPUs) to train models.
Character.AI lets people chat with virtual versions of celebrities like Billie Eilish or anime characters, while creating their own chatbots and AI assistants. It’s free to use, but offers a subscription model that charges $9.99 per month for users who want to avoid the virtual line to access a chatbot.
According to Similarweb data, Character.AI’s chatbots, with different roles and tones to choose from, appealed to users aged 18 to 24, who contributed about 60% of its website traffic. This demographic helps position the company as a provider of more fun personal AI companions, compared to other AI chatbots from OpenAI’s ChatGPT and Google’s Bard.
The company previously said its website attracted 100 million monthly visits in the first six months after launch.
The story, revealed exclusively by Reuters, comes as the startup is also in talks to raise money from venture capitalists, which could value the company at more than $5 billion, sources said . In March, it raised $150 million in a funding round led by Andreessen Horowitz, valued at $1 billion.