Google To Invest Millions In AI Chatbot Star Character.AI: Report

Google is looking to invest significantly in AI chatbot startup Character.AI as the generative AI wars continue to heat up in 2023.


Google is reportedly investing hundreds of millions of dollars in AI chatbot standout Character.AI just weeks after the world’s third largest cloud company agreed to pour $2 billion into AI startup Anthropic. The move shows that the generative AI wars between tech giants like Google, Microsoft and Amazon will likely continue to heat up in 2024.

The Mountain View, Calif.-based company is in talks to invest a large amount of money into the AI chatbot startup in order to form a deeper relationship with Character.AI, according to a report by Reuters. The AI startup was founded by former Google employees Daniel De Freitas and Noam Shazeer.

Character.AI provides chatbot services based on large language models (LLMs) that generate responses and open-ended conversations with users. The service became available in September 2022, followed by a $150 million funding round in March led by Andreessen Horowitz that valued the startup at $1 billion.

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The Menlo Park, Calif.-based startup currently leverages Google Cloud’s infrastructure and Tensor Processing Units (TPUs) to train its AI models on.

Google’s conversational GenAI chatbot Bard became generally available earlier this year.

Character.AI’s Google Connection

The startup was founded by two key Google engineers who were part of the company’s AI DeepMind projects.

Character.AI CEO Shazeer spent over 21 years at Google as a Principal Software Engineer before co-founding the company with De Freitas in late 2021. Character.AI’s president De Freitas spent nearly a decade at Google in top senior research engineer roles.

The two spearheaded Google’s LaMDA (Language Model for Dialogue Applications) dialogue system and conversation technology in 2020. The breakthrough technology is a collection of LLMs that work together to complete various generative AI tasks.

Google’s $2 Billion Anthropic Bet

In late October, Google unveiled it will invest up to $2 billion in AI startup Anthropic that included $500 million upfront.

Anthropic provides AI chatbot Claude which is a rival of OpenAI who owns ChatGPT. Claude is an GenAI assistant and foundation model based on the company’s research into training AI systems. OpenAI is backed heavily by Microsoft who has poured billions into OpenAI.

Microsoft, Amazon and Google are all competing to have AI startups use their cloud infrastructure and services for their AI technology and innovation.

Similar to Character.AI, Anthropic leverages Google Cloud’s services and TPUs.

Google’s massive investments in Anthropic and Character.AI shows the tech giant’s appetite in becoming a leader in the generative AI market. The largest IT companies in the world—Amazon, Microsoft, Nvidia and many more—are investing billions in AI startups in a GenAI race that shows no signs of slowing down next year after a blistering pace in 2023.