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Interface News reporter | Chen Zhenfang

Jiemian News Editor | Song Jianan

The big model capital game in the United States has entered a reshuffle phase.

Recently, the artificial intelligence startup Character.AI was acquired by Google, and its founders Noam Shazeer and Daniel De Freitas will return to Google's DeepMind division. DeepMind is mainly responsible for developing the Gemini suite of artificial intelligence products such as large language models and chatbots. It is expected that more than 30 people from Character.AI will "transfer" to Google at the same time.

Founded in 2021, Character.AI is headquartered in California. The company uses large models to generate dialogues of various characters and character styles, and the test chatbot product was opened to the public in September 2022. In May 2023, Character.AI released mobile applications on the Apple App Store and Google Play Store, with more than 1.7 million downloads in the first week, and was named the best AI application of 2023 by Google Play.

The company's co-founders, Noam Shazeer and Daniel DeFreitas, were both engineers at Google, working on AI-related projects. Noam Shazeer left Google twice, and founded Character.AI after his second departure.

Previously, Character.AI had been reported to have discussed cooperation with several companies including Meta and xAI, and finally chose to reach an acquisition agreement with Google. According to the agreement, Character.AI will provide Google with a non-exclusive license for its current large model technology.

Character.ai raised $43 million in seed funding when it was founded in 2021, and was valued at $1 billion after completing a $150 million financing in March 2023.

The company claims that the agreement will provide Character.AI with more funds. Specifically, Google will acquire its investors' shares at a valuation of $2.5 billion at $88 per share. Although this figure is lower than the $5 billion valuation rumored earlier, it also helped investors achieve a high multiple exit.

After Noam, Daniel and some members of the research team withdrew, Character.AI General Counsel Dominic Perella took over as interim CEO and continued to look for the next CEO. However, Google did not specify the specific responsibilities of the two founders at DeepMind.

Talking about the reason for the acquisition, Character.AI stated in an announcement that to achieve personalized super intelligence, a full-stack approach is required, and the model must be pre-trained and post-trained to enhance the Character.AI experience and build a product platform for global users.

“However, in the past two years, the situation has changed—there are now more pre-trained models available.” Given these changes, Character.AI believes that there are advantages to using more third-party large models in addition to using its own large models.

Google's acquisition of Character.AI also reflects some changes taking place in the field of large models. When innovation begins to slow down, large companies led by Microsoft and Google once again take the lead in terms of funding, technology, and talent, and start a new battle for artificial intelligence - acquiring small and medium-sized companies and bringing in core talents and technologies.

In March this year, Microsoft recruited key talents such as Mustafa Suleyman, CEO of AI startup Inflection. After Amazon acquired AI startup Adept, the latter's founders Shazeer and DeFreitas returned to Google.

The game of "big fish eat small fish" is not uncommon. Even OpenAI, which set off the AI ​​craze, was once one of the targets of acquisition. Previously, Musk hoped to take full control of OpenAI, but after being rejected by the core team, he chose to withdraw investment and set up xAI. In 2023, after OpenAI CEO Altman was "resigned", Microsoft also proposed a similar deal, butOpenAIUltimately it still exists as an independent entity.

AI startups have few options for surviving in a business world dominated by giants. Large-scale model startups not only need a team of top talents, but also need sufficient funds to purchase expensive chips and pay for huge R&D costs. When the development prospects are still unclear, being acquired is a relatively good outcome.

The same is true for the Chinese market. Since the beginning of this year, many investors have predicted that there will only be two or three large model companies in China in the future, and the rest will be acquired or leave. The merger and acquisition trend emerging in Silicon Valley may soon be repeated in the Chinese large model market.