Character.AI Chatbot Startup Draws $1 Billion Valuation After Andreessen Horowitz Funding

Character.AI, a 16-month-old chatbot startup company founded by two former Google employees, has garnered a $1 billion valuation after a new round of investment funding.

The company said Thursday that it raised $150 million in a new funding round led by venture capital firm Andreessen Horowitz, according to the Wall Street Journal.

Other previous investors in the startup include former chief executive of Microsoft unit GitHub Nat Friedman, and SV Angel, one of Silivon Valley’s most active seed investors.

Character.AI does not generate any revenue as stated by a representative for the company.

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The private company launched an early version of its software, which allows users to create and engage with chatbots that simulate characters or famous people like Vladimir Putin or Elon Musk in September. Former Google Engineers Noam Shazeer and Daniel De Freitas founded the star-up in Nov. 2021. The site gets 100 million visitors a month.

This latest funding will allow Character.AI to hire more engineers and expand the capabilities of its chatbot. The company plans to release an early preview of a more advanced chatbot model capable of writing emails or helping people study for tests.

This latest development in artificial intelligence comes after the race kicked off by startup OpenAI, which released its chatbot ChatGPT in November 2022. OpenAI was founded in 2015, and the company has received a pledge form Microsoft Corp. to invest billions of dollars into Aopen AI over several years.

Sarah Wang, a general partner of Andreessen Horowits, will join Character.AI’s board, as reported Thursday.

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“Character.AI is rapidly and dramatically advancing generative AI, with the potential to transform how humans connect,” Ms. Wang said.

Wang also wrote a blog post on investing in Character.AI, describing her experience with the chatbot.

“AI has gone mainstream, making it possible for us to engage with technology in ways that were previously only imaginable through movies like Spike Jonze’s “Her” or Tony Stark’s J.A.R.V.I.S. in ‘Iron Man,'” Wang wrote.