The potential deal might put the company’s value anywhere from $5 billion to $6 billion.
Character.AI, an artificial intelligence startup founded by former Google employees, is in the early stages of discussions to secure substantial funding, possibly exceeding $5 billion in valuation, Bloomberg reported on Thursday, citing people familiar with the matter who wished to remain anonymous.
According to the report, the company, having emerged as an early frontrunner in the realm of generative AI tools, has garnered substantial interest from potential investors, and these investors could put in additional funding for the firm. However, it is essential to note that the ongoing negotiations remain in their preliminary stage and are subject to change or termination.
Character.AI Could Be Valued at $10 Billion
The company’s spokesperson declined to comment on the exact valuation but did highlight Character.AI’s impressive achievements following a $150 million investment earlier this year in March.
“As our community of users continues to grow rapidly, so does interest in being part of the revolutionary technology we are building and delivering. While we continue to have productive conversations, any speculation about our fundraising or valuation is just that,” said the company’s spokesperson.
According to the Bloomberg report, the potential deal might put the company’s value anywhere from $5 billion to $6 billion, as indicated by the sources. However, two people familiar with the matter disclosed that there were talks about bringing the company’s valuation to as high as $10 billion.
Character.AI Introduces $10 Monthly Subscriptions for Users
The company, founded in 2021 by Noam Shazeer and Daniel De Freitas, two former Google employees, is still in its early stages, and its business model is evolving.
Earlier this year, Character.AI introduced a $10 monthly subscription service called c.ai+, which provides users with faster access to their messaging platform. This move aligns with the growing trend of companies developing generative AI, which creates new content like text and images based on user inputs.
Character.AI is making waves with its unique chatbot offerings capable of impersonating anyone or anything.
The company’s large language model allows users to develop a wide range of chatbots of fictional characters and celebrities capable of engaging in text conversations. So far, users have sent millions of messages to characters like the iconic Super Mario, generating AI-generated responses like “Hello! It’s me, Mario!” Elon Musk, the late iconic music star Michel Jackson, and the popular movie Breaking Bad/Better Call Saul.
Character.AI Reaches Unicorn Status
Since its launch in 2021, Character.AI has only conducted one fundraising. In March this year, the AI startup company raised $150 million in funding, reaching unicorn status two years after its launch.
Andreessen Horowitz led the investment round with participation from other institutional investors. According to the announcement, the funds would be used to compute abilities, resulting in a more sophisticated model with advanced reasoning and greater accuracy, delivering new features and capabilities to users, and expanding its engineering team.
A few months after the first financial round, the company started pursuing additional funding in July, according to the Information. The planned fundraising could offer the company more leeway as it tries to increase revenue by offering paid perks with a subscription.