Character AI: Building AI for everyone

In partnership with

(4 minutes)

Hi 👋, this is the Today in AI Newsletter: The weekly newsletter bringing you one step closer to building your own startup.

We analyze a cool, industry-shaping AI startup every week, with a full breakdown of what they do, how they make money, how much they’ve raised, and the opportunity ahead. 

Let’s get to the good stuff in this email: 

• This AI startup is building AI for EVERYONE. 

• They have over 4 million monthly active users and 160M+ website visits

• They’ve raised a $150M Series A at a $1B valuation led by a16z. 

So what’s the startup and who are the founders behind it? Here’s the story of Character AI 🎭:

Character AI was founded in 2021 by Noam Shazeer and Daniel De Freitas to bring AI character interactions to life.💃

Character AI lets you create and talk to advanced AI - language tutors, text adventure games, life advice, brainstorming, and more.

It leverages neural networks to generate lifelike characters that engage in dynamic, and superintelligent conversations.🤖

It’s essentially a platform that allows anyone to create, train, and deploy AI characters without needing any tech expertise.

Character even recently started allowing users to talk to these AI characters over calls in different languages. This is useful for things like mock interviews and practicing language skills.

So how did Noam and Daniel start out? 👶

Before Character, Noam worked at Google for about 20 years, where he worked on applications like spelling correction and the early LLM models.🦾

Here’s some of the things Noam worked on and invented at Google:

• Transformer - personally designed the multi-head attention and the residual architecture in 2017.

• Mesh-Tensorflow - the first practical system for training giant Transformers on supercomputers in 2018.

• Google’s LaMDA dialog system - an early LLM model in 2019

The other co-founder, Daniel, had worked on Microsoft Bing for a couple of years before joining Noam at Google, also working on early LLM applications. He led the LaMDA LLM system project.

The two met while working on the LaMDA project at Google. After working together, they realized the potential for creating AI characters that could interact with users in a human-like and engaging way.

They left Google, decided to pursue this idea full-time, and officially founded Character AI in 2021.👨‍💻 

Their breakthrough came when they developed an AI model that could understand and generate complex monologues.

They launched a beta version of their platform, and within days, it started gaining traction…

In it’s first week it received 1.7 million downloads, and in the first 12 days it received 8.8 million downloads.

Their first major client was a global e-commerce giant that used Character AI to create a virtual shopping assistant, which significantly improved customer satisfaction and sales conversion rates.

Seeing success, more companies across various industries started adopting Character AI’s technology, leading to rapid growth and expansion.📈

What does Character AI do? 💬

Character AI lets you create and talk to advanced AI chatbots and makes boring conversations engaging.

Noam and Daniel took inspiration from gaming characters and used similar features to build chatbots.

Their AI characters don't just respond to you, they also learn and adapt to your preferences. This makes each interaction more personalized and effective.🕺

Character AI’s tech is super general so can be used for millions of different use cases. Users can just talk to character’s applications and come up with new value themselves.

Their mission according to Noam, is to have a billion users inventing a billion use cases.🅱️

A lot of people actually use Character to chat with chatbots of infamous figures like Elon Musk and Albert Einstein which are super engaging and human-like. 🧠 

The platform allows any person to create AI characters that can handle questions, give recommendations and even offer emotional support.

This has led them to collaborate with some of the largest corporations worldwide, including Google and Meta, to make their chatbots the best in the world. 🌍 

Stats📊 

💸On March 23rd 2023, Character AI raised a $150M Series A at a $1B valuation led by Andreessen Horowitz. Other investors included Nat Friedman (Former Github CEO) and Elad Gil.

📈 According to Wired, they’re estimated to have an annual revenue of $16.7M in 2024, and about 120 employees.

Over the past year, they’ve also significantly increased their user engagement metrics with the average session duration being 25-45 minutes. 

The founders believe that Character AI will redefine digital interactions and aim to make it the go-to platform for AI-driven character interaction. 

This vision has earned Noam recognition in the AI industry, being recently featured in the TIME100 AI Innovators list.

Before you go 👋

Prove safe and responsible use of AI - get $1,000 off Vanta

If you’re building or selling AI-powered products, demonstrating top-notch security practices and establishing trust is more important than ever.

With Vanta, you can quickly and easily demonstrate compliance with gold-standard AI frameworks like ISO 42001 and NIST AI RMF.

Vanta helps you prove secure deployment of AI, build customer trust, and accelerate your sales cycle.

Plus, with Vanta’s Questionnaire Automation, you can automate your responses to lengthy security questionnaires about your security posture and AI practices.

Learn more and claim a special offer of $1,000 off Vanta at the link below.

Get $1,000 off Vanta

Thank you for reading.

Know someone who'd love this newsletter? Share the love. 🌟