Character AI in talks with Google for its next round.

Character AI is looking to raise again. It allows people to create virtual characters and chat with them, which is highly popular among younger audiences. The tea is that Google wants to get a piece for themselves.

What's going on here?

Google wants to invest many hundred millions into Character.AI

What does this mean?

The current round is supposed to value Character AI at $5B. It last raised $150M in March 2023 at a $1B valuation with a16z leading the round.

Character AI was founded by former Google employees Noam Shazeer and Daniel De Freitas. They are already using Google Cloud and TPUs for training their models and this will get Google more skin in the AI characters/personas game.

Why should I care?

Characters are an AI use case that business AI tools gloss over. Meta is going heavy in that direction with their celebrity-inspired AI avatars and in some form, OpenAI’s newly launched GPTs could also capture some part of that market. Character AI is the leader right now and Google might be trying to use it in their favour.