The capital game in the US large language model sector is entering a reshuffling phase. AI startup Character.AI has been acquired by Google, with founders Noam Shazeer and Daniel De Freitas returning to Google's DeepMind division. It's expected that over 30 people from Character.AI will "transfer" to Google simultaneously.
Character.AI was founded in 2021 and is headquartered in California. The company uses large language models to generate conversations in various character styles. It opened public testing in September 2022. In May 2023, it released a mobile app that was downloaded over 1.7 million times in its first week and was named the best AI app of 2023 by Google Play.
Character.AI had discussions with several companies but ultimately chose to reach an acquisition agreement with Google. Under the agreement, Character.AI will provide Google with a non-exclusive license to its current large language model technology. Google will acquire investor stocks at $88 per share, valuing the company at $2.5 billion.
Character.AI stated that achieving personalized super-intelligence requires a full-stack approach, but changing circumstances have made using third-party large language models more advantageous. This acquisition reflects changes in the large language model field, with big companies starting a new AI talent war by acquiring smaller companies along with their core talent and technology.
Similar acquisition cases include Microsoft recruiting key talent from Inflection and Amazon acquiring Adept. AI startups face development challenges, and being acquired becomes a relatively good outcome.
The Chinese market is facing similar trends, with predictions that only two to three large language model companies will be needed in the future, while others will be absorbed or exit. The merger and acquisition trends in Silicon Valley may soon be replicated in the Chinese large language model market.