One of the researchers from the famous paper that marked the breakthrough of the current AI era 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 called Character.AI.
The startup Character.AI, endowed with a 150 million dollar capital injection (more than 136 million euro) and a 1 billion dollar valuation, 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 workers are also moving to Google. The tech giant has also struck a deal with the startup for non-exclusive use of its developed LLMs.
Although Character.AI will remain alive, Google is buying out the investors for 88 dollars per share, more than 2.5 times the share value since the previous investment round. Character.AI claimed the platform attracted 100 million monthly visitors. It was reportedly already gearing up for another investment round, aiming for a 5 billion dollar valuation. Just last year, there was talk that Google might 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 already announced that from now on, it will use not only its own LLMs but also those of other parties.
Noam Shazeer, one of the authors of the famous 2017 article “Attention is All You Need,” was the CEO of Character.AI. He now joins DeepMind, Google’s AI division. Daniel De Freitas, the other top talent moving back to Google, held the role of ‘president’ of Character.AI. Exactly what their new roles will be has not been disclosed.
Gobbling up AI startups: a proven method
Google’s method is somewhat similar to what Microsoft’s did when that company brought in Mustafa Suleyman earlier this year. This former CEO of startup Inflection AI now leads a newly formed AI division at Microsoft focused on consumer applications. This includes the teams of browser Edge, search engine Bing and perennial AI promise Copilot.
Suleyman co-founded DeepMind and co-headed Inflection AI when Microsoft brought him over. Simultaneously, the tech giant pretty much took over Inflection AI’s entire management and workforce. As a result, the company has effectively been acquired without an official takeover or sale. As well as Suleyman, Microsoft hired Karén Simonyan, also a co-founder of Inflection AI. He now works as chief scientist of the consumer AI division.
Microsoft compensated the now rather human capital-starved Inflection AI by paying 620 million dollars to license its software and LLMs. The company also paid 30 million dollars to settle all legal consequences of the unofficial acquisition.
Such ‘acqui-hires,’ in which a company is not officially acquired but its key people and assets are simply bought up with offers too good to pass up, frequently lead to scrutiny by antitrust authorities in the US and Europe.
Also read: Microsoft understands that AI is more than a Copilot button