Character.AI Reportedly Raises $200 Million — At a $1 Billion Valuation — Amid Artificial Intelligence Boom

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With the artificial intelligence boom in full swing, Character.AI, which enables users to have text-based conversations with imitations of public figures including artists, now boasts a reportedly $1 billion valuation.  

The considerable worth of Character, which was founded by former LaMDA developers Noam Shazeer and Daniel De Freitas, came to light in a recent report from the Financial Times. And while the ChatGPT rival and its reported backers have yet to confirm the round publicly, The Information in January reported that Character was hunting for up to a quarter of a billion dollars in investor capital.

Having launched in beta last September, Character, as its name suggests, enables users to create and interact with a variety of bots designed to mimic the aforementioned public figures as well as fictional characters, certain professionals (language teachers, therapists, etc.), and more.

A portion of the available chatbots can generate images based upon users’ inputs, and on the music side, Character’s conversation options currently include Billie Eilish, Twice’s Nayeon, and Apple CEO Tim Cook, to name a few.

According to the Financial Times, Andreessen Horowitz (a16z) led Character’s $200 million to $250 million round, which valued the AI-powered platform at approximately $1 billion.

As noted, neither a16z nor Character appears to have commented publicly on the reported raise, and the AI platform wasn’t featured on Andreessen Horowitz’s portfolio webpage at the time of this writing. But the reportedly massive round arrives as artificial intelligence (which the RIAA at 2023’s start identified as a “specific lobbying issue”) is playing an increasingly significant role in the music industry.

To be sure, 2022 saw AI music-tech platform LifeScore raise £11 million from backers including Warner Music Group, and AI music-creation service Soundful (which says that it “enables anyone to create incredible music quickly”) pulled down $3.8 million from Universal Music Group, Disney, and more. Additionally, SoundCloud last year bought Musiio, Songtradr acquired Musicube, and Spotify scooped up Sonantic.

On top of these investments and buyouts, 2023’s first two or so months have seen AI from ElevenLabs and others create all manner of voices (some of which mimic specific individuals based upon brief audio samples). DistroKid has released Mixea (“an intelligent mastering tool”), Apple’s gone ahead and rolled out a number of AI-narrated audiobooks, and Spotify in late February debuted an AI-driven personal DJ with an eerily realistic voice.

Expanding upon the latter, an AI radio DJ called “RadioGPT” could dramatically change the broadcasting landscape, and Google’s similarly important MusicLM is capable of generating music from text prompts. Needless to say, it’ll be worth monitoring AI’s music-sphere impact – including an array of potential pitfalls – during the remainder of 2023 and beyond.