Launched in September 2022, Character.ai uses the same technology as ChatGPT to generate conversation in the style of both real and virtual characters. The beta version of the platform was developed by ex-developers of Google’s LaMDA team. On March 23, the company announced a $150mn fundraising round led by Andreessen Horowitz, amidst plummeting valuations and increasing scrutiny around the tech industry.
Noam Shazeer, CEO and co-founder at Character.ai, said in an interview that the business will soon receive additional capital from a few “strategic partners”, signaling two-way contracts where money invested by cloud computing companies is in turn used to fund purchases of computing power from the same providers. The business is valued lucratively at $1bn even without an existing revenue stream, with most of its value coming from the 100 million monthly site visits it has attracted.
Venture capital founder Andreessen himself is regarded as a trailblazer in Silicon Valley, having launched Netscape, a web browser, back in 1994. He made early bets on the likes of Airbnb, Lyft and Stripe, just to name a few. Today, Andreessen’s funds have a combined asset-under-management (AUM) of $35bn.
“We started the company because we want to get this technology in the hands of everybody on Earth, where a billion people can invent a billion use cases,” said Shazeer. With the funds raised, the business plans to work towards the launch of a paid subscription “in the not distant future”. For reference, another AI chatbot Replika is charging paid users a $69.99 annual fee. Cohere, another generative AI start-up also founded by Google alumni, is raising funds as a valuation in the range of $6bn. Hoffman, former board member of OpenAI, termed 2023 the year we see breakthrough AI innovation. He expects that over the next 20 years, the majority of economically valuation functions in society will be performed by AI.