Google Hires Character.AI Staff, Licenses Tech

Character.AI co-founder and chief executive Noam Shazeer is to return to Google after leaving the company in October 2021 as part of a deal that will also see Google signing a non-exclusive deal to use the start-up’s large language model (LLM) technology.

Shazeer previously headed the team of researchers that created Google’s LaMDA (Language Model for Dialogue Applications), a language model for conversational AI tools.

The deal, whose value was not disclosed, will also see Character.AI co-founder Daniel De Freitas return to Google along with some other researchers, the company said in a blog post.

Character.AI’s general counsel Dominic Perella is to become interim chief executive of the firm effective immediately.

Licensing deal

The deal provides increased funding for Character.AI, the company said, without specifying the amount.

The start-up’s executives told staff that investors would be bought out at a value of about $88 (£69) per share, or about 2.5 times the value of shares in Character’s 2023 Series A funding round, which valued the firm at $1bn, The Information reported.

Most of Character’s staff will be remaining with the company, it noted.

Google said Shazeer would be joining its DeepMind AI team but did not specify his role.

“I am super excited to return to Google and work as part of the Google DeepMind team,” Shazeer said in a statement.

“We’re particularly thrilled to welcome back Noam, a preeminent researcher in machine learning, who is joining Google DeepMind’s research team, along with a small number of his colleagues,” Google stated.

Character has raised more than $150m in funding to date, largely from Andreessen Horowitz, also known as a16z.

Strategy shift

Character said in its announcement that the company would also be shifting from reliance on its own technology to “greater use of third-party LLMs alongside our own”, a move it said would allow it to shift its focus from LLM training to creating user products.

Google’s move echoes Microsoft’s mass hiring of most of the research staff of Inflection AI, along with Mustafa Suleyman, who co-founded DeepMind and Inflection, while making a $650m investment in the start-up.

Such moves are facing regulatory scrutiny, with the UK’s Competition and Markets Authority (CMA) last month opening a probe into the Microsoft-Inflection acqui-hire.

The CMA also last week opened a probe into Google parent Alphabet’s partnership with AI firm Anthropic amidst concerns that the biggest tech companies are buying up in-demand AI staff in order to dominate the emerging industry.