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Google eyes significant investment in AI chatbot start-up Character.AI

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Google is in discussions to invest hundreds of millions of dollars in Character.AI, a rapidly growing AI Chatbot start-up, as the company seeks capital to train models and meet increasing user demand. As per news sources, the potential investment, possibly in the form of convertible notes, will strengthen the existing partnership between Character.AI and Google. The start-up at present, utilises Google’s cloud services and Tensor Processing Units (TPUs) for model training.

Founded by former Google employees Noam Shazeer and Daniel De Freitas, Character.AI enables users to engage with virtual versions of celebrities like Billie Eilish or anime characters, while also allowing them to create their own chatbots and AI assistants. Although the platform is free, it offers a subscription model at $9.99 per month for users seeking expedited access to chatbots.

Character.AI’s chatbots, offering various roles and tones, have gained popularity among users aged 18 to 24, constituting around 60 per cent of the website’s traffic. This demographic positioning distinguishes the company as a provider of more entertaining personal AI companions compared to other AI chatbots like OpenAI’s ChatGPT and Google’s Bard.

Character.AI is also in discussions for equity funding from venture capital investors, a move that could potentially value the company at over $5 billion. In a funding round led by Andreessen Horowitz in March, Character.AI raised $150 million, achieving a valuation of $1 billion. 

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