Google likely to invest in AI start-up Character.AI

As Character.AI seeks capital to train models and keep up with user demand, Alphabet's Google is in talks to invest hundreds of millions of dollars in this fast-growing artificial intelligence chatbot start-up, as per news report. The investment, which could be structured as convertible notes, will deepen the existing partnership Character.AI already has with Google. Character.AI uses Google's cloud services and Tensor Processing Units to train models.

Character.AI was formed by two former employees at Google Brain - Noam Shazeer and Daniel De Freitas.  

Character.AI enables people to chat with virtual versions of celebrities while creating their own chatbots and AI assistants. The chatbot is free to use but also offers a subscription model for $9.99 a month for users who want to skip the virtual line to access a chatbot.

According to a report, Character.AI's chatbots, with various roles and tones to choose from, have appealed to users ages 18 to 24, who contributed about 60% of its website traffic. The demographic is helping the company position itself as the purveyor of more fun personal AI companions, compared to other AI chatbots from OpenAI's ChatGPT and Google's Bard.