Google Hires Character AI Cofounders, Licenses Technology in Third Major Acquihire with 2.5x Return

Aug 2, 2024, 06:35 PM

Google has hired the co-founders of Character AI, Noam Shazeer and Daniel De Freitas, along with several employees, in a non-exclusive agreement to license the AI startup's technology. This move is part of a larger trend where major tech companies are acquiring AI startups through licensing deals rather than traditional mergers and acquisitions. The deal allows Google to integrate Character AI's models into its operations, similar to previous deals where Microsoft acquired Inflection AI and Amazon acquired Adept. Investors in Character AI, including Andreessen and Greycroft, are expected to see returns from this transaction, with a 2.5x return for Character investors. The co-founders expressed enthusiasm about joining Google DeepMind and continuing their work in AI research. This marks the third acquihire of a major AI startup by a big tech company, described as a pseudo M&A.