Google Strikes Licensing Deal with Character AI, Poaches Top Execs for DeepMind

Google strikes licensing deal with Character AI and poaches top executives for DeepMind: Google and AI avatar company Character AI have entered into a licensing agreement that will provide Character AI with increased funding in exchange for access to its large language model (LLM) technology:

• The deal allows Character AI to focus on developing personalized AI products for users worldwide, leveraging Google’s LLMs while continuing to invest in its own post-training capabilities.
• Character AI’s founding team, Noam Shazeer and Daniel De Freitas, along with some members of its research team, will join Google, with Shazeer specifically joining the DeepMind team.
• The company’s general counsel, Dominic Perella, will take on the role of interim chief executive officer, while most of Character AI’s employees will remain with the company.

Shifting landscape in the AI industry: Character AI, founded in 2022 and valued at $1 billion as of March 2023, has recognized the changing dynamics in the AI industry and is adapting its strategy accordingly:

• Previously, Character AI built its own models using a full-stack approach, but the increasing availability of off-the-shelf, pre-trained models has prompted the company to shift its focus to post-training models and creating new products for users.
• This move comes amidst reports of Meta discontinuing its celebrity AI chatbots, which were seen as rivals to Character AI, due to low user uptake and engagement.

Details of the deal and regulatory considerations: While the specifics of the licensing agreement between Google and Character AI have not been disclosed, the deal highlights the ongoing trend of big tech companies acquiring or hiring talent from AI startups:

• Sources close to the deal have indicated that it is neither an acquisition nor an acqui-hire, a strategy sometimes employed by big tech companies to avoid regulatory concerns.
• This development follows reports of Elon Musk’s AI startup xAI considering the purchase of Character AI, which Musk later denied on his social network, X (formerly Twitter).

Implications for the future of AI: The licensing deal between Google and Character AI showcases the growing interest and investment in AI technologies, particularly in the realm of personalized AI avatars and large language models:

• As the AI landscape continues to evolve, collaborations and talent acquisitions between established tech giants and promising startups are likely to become more common, driving innovation and shaping the future of the industry.
• The increased funding and access to Google’s LLMs position Character AI for continued success and growth, allowing the company to focus on developing innovative products that cater to the needs and preferences of its users.