Google Acquires Non-Exclusive License to Character.AI’s LLM Technology, Welcomes Back Co-Founders

In a groundbreaking development that underscores the intensifying battle for AI talent and technology, Google has inked a licensing deal with artificial intelligence startup Character.AI. The agreement grants the tech giant a non-exclusive license to Character.AI’s large language model (LLM) technology, while also seeing the return of co-founders Noam Shazeer and Daniel De Freitas to the Google fold.

Regulatory Scrutiny and Growing Concerns

The deal, which mirrors similar agreements struck by Microsoft and Amazon in recent months, is likely to face heightened regulatory scrutiny. Both the U.S. and Europe have expressed growing concerns over how tech giants are assembling these AI deals, funneling billions into bolstering their AI infrastructure and aggressively hiring top talent from startups.

“Those other deals are being scrutinized by regulators, reflecting growing concern in both the U.S. and Europe about how AI deals are put together by tech giants who are funneling billions into bolstering their AI infrastructure and hiring the best researchers from startups,” the article notes.

Funding and Leadership Changes at Character.AI

As part of the agreement, Character.AI will receive additional funding from Google, though the exact amount remains undisclosed. The startup’s general counsel, Dominic Perella, will assume the role of interim CEO, effective immediately.

In a statement, a Google spokesperson expressed particular excitement about welcoming back Noam Shazeer, a renowned machine learning researcher, who will join the Google DeepMind research team along with a select group of his colleagues.

Comparison to Microsoft and Amazon’s AI Deals

The Character.AI deal follows similar high-profile acquisitions in the AI space. In March, Microsoft paid $650 million to bring on the co-founders and dozens of staff from AI startup Inflection, while in June, Amazon hired several co-founders and employees from Adept, another AI startup.

Character.AI, which previously raised $193 million in venture capital from investors including Andreessen Horowitz, was reportedly in talks to raise hundreds of millions from Google as early as November 2023. The startup’s $1 billion valuation pales in comparison to the $1.3 billion and $415 million raised by Inflection and Adept, respectively.

Implications and Future Outlook

The Character.AI deal underscores the growing importance of AI technology and the fierce competition for top talent in the field. As tech giants like Google, Microsoft, and Amazon continue to invest heavily in AI, the regulatory landscape is likely to become increasingly complex, with scrutiny focused on how these acquisitions and licensing agreements are structured.

For Character.AI, the Google partnership represents a significant milestone, providing the startup with additional funding and resources to accelerate its progress in the rapidly evolving AI landscape. The return of co-founders Shazeer and De Freitas to Google’s ranks is a testament to the company’s continued appeal as a destination for AI researchers and engineers.

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