AI: Another possible key AI Talent acqui-hire. RTZ #436
...this time it could be Elon Musk's xAI and Character.ai
(Update: Google ended up ‘aqui-hiring’ Character.ai, not xAI. Now it’s three of these ‘one-stop shop’ deals to date: Microsoft/Inflection, Amazon/Adept, and Google/Character.ai)
Acquiring top AI talent at Scale remains an a competitive race in this AI Tech Wave. Preferably in ‘bulk’ in a ‘one-stop shop’ process.
Yesterday I discussed how Meta is shutting down its experiment with AI Celebrity Chatbots, going onto try AI Studio for Creators. The tools allow creators to build content for Meta’s two billion plus global users of Instagram, Facebook, WhatsApp and other apps. Especially around Meta’s short video Reels product on those services, which competes with Google YouTube’s Shorts, and of course TikTok.
Today, it emerged that Elon Musk’s xAI, may be interested acquiring Character.ai, the leading provider of ‘AI Chatbots’, founded by some of the best AI scientists in the business. As the Information notes in “Musk’s xAI Has Considered Buying Character.AI”:
“XAI has considered an acquisition of chatbot maker Character as Elon Musk’s AI startup hunts for talent and more ways to test its AI models.”
“XAI, Elon Musk’s one-year-old artificial intelligence startup, has considered acquiring chatbot maker Character.AI as it looks for more ways to test its Grok AI models, according to a person who spoke with xAI leadership about the deal.”
“The discussion may not result in a deal. But the internal debate at xAI points to the types of pairings that are likely to become more common as smaller AI startups such as Character face the steep costs of training and running their models while competing against deep-pocketed rivals.”
If it goes through, it’d be the third major ‘Acqui-Hire’ type of AI deal after the Microsoft/Inflection, and Amazon/Adept deals I wrote about earlier:
“Other conversational AI startups such as Adept and Inflection have effectively sold themselves to Amazon and Microsoft, respectively, despite having raised considerable capital in the past two years.”
“XAI has raised more than $6 billion and Musk has told investors he intends to raise more money in the future. Musk plans to use much of that money to expand xAI’s compute capacity, but he could look at consumer AI startups other than Character for potential acquisitions, the individual who spoke to xAI leaders said.”
Noam Shazeer, a Character.ai founder and CEO, is one of the pre-eminent AI researchers from Google, that wrote the seminal “Attention is all you need” AI paper back in 2017, that got the whole ‘Transformer’ based Generative/LLM AI thing going, including OpenAI’s GPT models and ChatGPT:
“Two former Google researchers—Noam Shazeer, now Character’s CEO, and Daniel De Freitas, its president—founded Character in November 2021. Shazeer, one of the authors of a foundational generative AI research paper, and De Freitas left Google in part due to frustration with the company’s bureaucracy.”
As I’ve highlighted before, top-tier AI research and engineering title is one of the scarce inputs in this AI Tech Wave, along with AI GPUs, Data, Datacenters, and Power, amongst other key ingredients.
Large AI ‘Acqui-hires’ are but one way to continue to move the AI innovation ball forward. This one around Character.ai, is one of the more attractive ‘one-stop shop’ move on the AI talent front. Stay tuned.
(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)
Great post as always, Michael. And there's no doubt great talent can be found in Google, FB, et al. It's the best land grab most can muster today.
However, AI software and hardware (hw in general per Moore's Law) has grown increasingly stagnant. The sun is setting on silicon and other ~60 year old battleship technologies.
Surely more of the same isn't the future - specialists in current Cat 3 AI are unlikely to be the builders of what we need next. They're indoctrinated in the patterns of the past.