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London Tech Week

ChatGPT rival founded by ex-Google employees hits unicorn status, raises $150M at $1B valuation

Character.AI
Photo Credit: Character.AI

Character.AI is one of a small group of startups — alongside the internet industry’s behemoths — developing technology that could one day rival the systems under development at OpenAI, the San Francisco startup that sparked the AI boom with the launch of an online chatbot dubbed ChatGPT.

Meanwhile, the 16-month-old firm that creates online chatbots, announced a $150M investment round that valued the company at $1B and has hit unicorn status.

The funding round was led by Andreessen Horowitz (a16z) along with participation from previous investors, including Nat Friedman (former GitHub CEO), Elad Gil, SV Angel and A Capital. Andreessen Horowitz General Partner Sarah Wang will join Character.AI’s board of directors.

More sophisticated model to compete with ChatGPT

The money raised will help Character.AI to continue its rapid growth by growing its computational capabilities, which will result in a more sophisticated model with better reasoning and improved accuracy, bringing new features and capabilities to users, and expanding its technical team.

“Daniel and I are pleased that a world class group of investors, led by the amazing team at a16z, believes in the remarkable advancements we’re making in AI, the company we’re building, and the value we can deliver to society and investors. We are gratified that they recognize our ability to revolutionize AI and improve the way people live,” said Shazeer. “Character.AI’s power is our highly-sophisticated language model, which rapidly analyzes and contextualizes large volumes of information to produce useful intelligence tailored to each individual, making it a personalized superintelligence companion that enhances productivity, offers advice, educates, and entertains. The potential use cases are infinite.”

Character, founded in 2021 by AI and language model pioneers Noam Shazeer and Daniel De Freitas is a conversational artificial intelligence platform that provides individuals with a personalised artificial intelligence experience by utilising big language models and deep learning algorithms that can detect, summarise, translate, predict, and generate text and other information. The platform allows anyone to create and interact with Characters, allowing users to create and share their own, individualised use cases.

“For years, we’ve known the potential and power of conversational AI, and it’s incredibly rewarding to see people from around the globe use Character.AI for a huge variety of use cases. We understand the importance of providing an AI that truly feels like your own. Our world-class team of engineers continue to develop new frontiers in large language models and AI, bringing together the EQ and IQ to deliver an unparalleled and personalized experience to each user. ​​Whether you’re looking for productivity, entertainment, or a supportive friend, Character.AI is here for you, ready to assist and support you every step of the way,” said De Freitas. “Character.AI is proud to be a full-stack AI company, meaning we do everything from training the language models to building the user interface. This gives Character.AI the power to create personalized experiences no other AI can match.”

While at Google, Character.AI’s Noam Shazeer and Daniel De Freitas, AI’s founders, headed a team that developed a system known as LaMDA, which stands for Language Model for Dialogue Applications. This August, a Google engineer, Blake Lemoine, told The Washington Post that he believed LaMDA was sentient.

Shazeer and De Freitas had already departed Google at that point to create Character.AI.

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