IA: Brazilian startup could be valued at R$25 billion – 09/28/2023 – Market

Character.AI, an artificial intelligence (AI) startup co-founded by Brazilian Daniel de Freitas, is in initial negotiations to raise hundreds of millions of dollars in new investments that could value it at more than US$5 billion (R$ 25 billion), according to people familiar with the matter.

The company’s website (beta.character.ai), still in beta, offers chatbots that can impersonate anyone or anything.

Character.AI was an early darling in the field of generative artificial intelligence and has received significant interest from investors, said these people, who asked not to be identified discussing private information. Negotiations for the deal are at an early stage and could still fail, they said.

A deal could value the startup in the range of $5 billion to $6 billion, they said. In early investor talks, a valuation of up to $10 billion was discussed, two of the people said. Even the lower price, however, would still be a big jump from the $1 billion figure in the company’s last funding round.

A company spokesperson declined to comment on the startup’s valuation, but said Character.AI had reached “significant milestones” after raising $150 million from investors earlier this year.

“As our user community continues to grow rapidly, so does interest in being part of the revolutionary technology we are building and delivering,” he said. “While we continue to have productive conversations, any discussion about our fundraising or valuation is just speculation.”

Character.AI was founded by former Google employees, Noam Shazeer and Brazilian Daniel de Freitas. Their service allows people to create a variety of chatbots capable of having text conversations. The startup’s users sent tens of millions of messages to characters like Super Mario, based on the video game character. The characters then offer AI-generated responses, for example, in this case: “Hello! It’s-a me, Mario! [Olá! Sou eu, Mario!]”

Founded in 2021, Character.AI is still in its early days and its business model may evolve. Earlier this year, the company began offering a $10 monthly subscription to a service called c.ai+, which allows users to access its messaging service faster.

The startup is one of many that are developing generative AI, software that takes user input and generates new content, such as text or images, such as OpenAI’s ChatGPT and Google’s Bard.

As the market valuation of AI companies increases, some investors are speculating whether venture capital firms should fund large language models like the one built by Character.AI, given the enormous computing expenses to develop and operate this type of language. specialized technology.

Some in the industry argue that it makes more sense for these startups to seek support from strategic investors, such as Microsoft, which is investing more than $10 billion in OpenAI.

Technology news site The Information reported in July that Character.AI was talking to investors about a new round of funding.