Google's $2.7 Billion Gambit: The Return of AI Genius Noam Shazeer

Why Google paid $2.7 billion to reclaim its lost AI genius

In a powerful and strategic initiative, Google has invested $2.7 billion to bring Noam Shazeer and Daniel De Freitas, the founders of AI startup Character.AI, back to Google. The announcement in August not only licensed Google to Character.AI's leading technology but also brought Shazeer and De Freitas back to Google, where they will focus on AI work, particularly the future AI model Gemini. Noam Shazeer, who initially joined Google in 2000 and later co-authored the groundbreaking AI paper "Attention Is All You Need," left the company in 2021 after it refused to release a chatbot he and De Freitas had developed. Irritated by what he regarded as Google's too-careful handling of AI, Shazeer quit to launch Character.AI. This startup swiftly rose to prominence for its cutting-edge chatbots that could mimic various personalities and fictional characters. As of last year, Character.AI rapidly achieved a valuation of $1 billion. In any case, according to WSJ, the $2.7 billion agreement with Google has triggered that valuation to soar to $2.5 billion as part of a broad agreement that covers the buyout of shares held by existing investors and a non-exclusive licensing of Character.AI technology. This deal is more than just a licensing agreement; it represents a "reverse acqui-hire" strategy that has become increasingly common in the tech industry. By confirming Shazeer and De Freitas's return, Google avoids the regulatory concerns that tend to arise with total acquisitions and still acquires superior talent. This technique illustrates the high-stakes rivalry in AI, revealing that having the best talent is important for sustaining a competitive advantage. Dominic Perella, who was previously the general counsel, will take the position of interim CEO as Character.AI will remain independent. Even though the co-founders have gone back to Google, the startup's existing product offerings will remain, and most of its talented team will stick around to progress Character.AI. Returning to Google is considered a vital success for the organization, especially since Shazeer will be one of the top leaders directing Google's strategy for creating the future of its AI technology, Gemini. Shazeer has emphasized his enthusiasm for getting back to Google, pointing to the possibilities for new developments enabled by the resources that are now in place. Google's commitment reflects the bigger trend of technology powerhouses eagerly taking on professional talent from successful AI startups to maintain a competitive advantage in the constantly developing AI field. Firms like Microsoft and Amazon have implemented uniform strategies by putting extensive investments into hiring key AI talent. The agreement with Character.AI stands apart not only regarding its financial aspects but also because of the strategic importance of bringing Shazeer on board again, a professional who has repeatedly emphasized the promise of AI. Google's campaign to lead the AI field will likely rely greatly on his expertise, especially in creating generative AI models.

Google paid $2.7B to rehire AI genius who left after company refused...

Google paid $2.7 billion to rehire an artificial intelligence genius who left the tech giant in a huff three years ago to found his own startup, according to a report. Noam Shazeer, a 48-year-old software engineer who was first hired by Google as one of its first few hundred employees back in 2000, left the company in 2021 after it refused his request to release a chat bot that he had developed with a colleague, Daniel De Freitas. Shazeer and De Freitas went on to found Character.AI, which grew to become one of the hottest AI startups in Silicon Valley that would eventually reach a $1 billion valuation last year. Last month, Google and Character.AI announced that Shazeer, De Freitas and certain members of Character.AI's research team would be joining Google's AI unit DeepMind. At the time of the deal, Character.AI said that it had more than 20 million monthly active users. Google paid Character.AI $2.7 billion to license its technology as well as to get Shazeer and his team to agree to work for the company, according to The Wall Street Journal. The licensing deal, which is short of a full-fledged acquisition, is a unique arrangement that allows Google to immediately access Character.AI's intellectual property without having to wait for the regulatory approvals and bureaucratic sign-offs that would have been required if the company was bought outright. Shazeer's return to Google is widely viewed among company employees as the primary reason behind the acquisition of Character.AI, the Journal reported. Eric Schmidt, former CEO of Google, was reportedly impressed with Shazeer -- so much so that he was convinced he would be able to build an AI model that could operate with human-level intelligence, according to the Journal. "If there's anybody I can think of in the world who's likely to do it, it's going to be him," Schmidt was quoted as saying of Shazeer during a talk at Stanford University in 2015. In 2017, Shazeer and another Google colleague, De Freitas, teamed up to create Meena, a chat bot that could engage humans on a range of issues. According to the Journal, Shazeer was so confident of Meena's utility that he predicted it would one day replace Google's search engine. But Google executives thought it was too risky to release Meena due to concerns about safety and fairness, the Journal reported. Google tapped Shazeer, who netted hundreds of millions of dollars in the transaction, to be one of three people who will lead the company's efforts to build the next version of Gemini, Google's next-generation AI model that was built to compete with rivals such as OpenAI's ChatGPT. Earlier this year, Google temporarily suspended Gemini's image-generating feature after it produced inaccurate "woke" depictions such as minority founding father and diverse popes. Last month, Google lifted the suspension and allowed users to create images using prompts after fixing the bugs. The steep price that Google paid to bring Shazeer and De Freitas back into the fold is indicative of the expensive race among Silicon Valley tech giants to hire the best talent during the AI era -- particularly in the wake of OpenAI's rollout of ChatGPT. The talent wars have heated up to the point where Meta CEO Mark Zuckerberg and Google co-founder Sergey Brin personally wrote notes to recruits urging them to come aboard. Brin is reportedly the key figure in helping to persuade Shazeer to return to Google, according to the Journal. Companies like OpenAI pay prized recruits compensation packages ranging from $5 million to $10 million -- mostly in the form of stock. Meta has developed a reputation for being somewhat stingy, offering pay packages of between $1 million and $2 million, according to data unearthed by the tech-centric news site The Information.

Google Reportedly Spent $2.7 Billion to Rehire Character.AI Founder | PYMNTS.com

Google reportedly paid $2.7 billion to rehire ex-employee/AI guru Noam Shazeer. According to The Wall Street Journal (WSJ), Shazeer, who co-authored research that helped popularize artificial intelligence (AI), left Google in frustration after the company refused to release a chatbot he had developed. He started his own company, Character.AI, which became known for its AI chatbots that could replicate a range of personalities and fictional characters. Earlier this year, Google announced that Shazeer would be coming back to the company as part of a major licensing deal. The price tag of that deal was around $2.7 billion, the WSJ said, citing sources with knowledge of the arrangement. They say that deal included another stipulation: Shazeer agreed to return to Google. It's a situation, the report adds, that sits at the heart of a debate about whether tech giants are spending too much in their race to build cutting-edge AI. "Noam is clearly a great person in that space," said Christopher Manning, director of the Stanford Artificial Intelligence Laboratory. "Is he 20 times as good as other people?" The report also notes that Shazeer's return to Google came after he publicly stated that the company had become too timid about developing AI. Now, he's one of the leaders of Google's Gemini AI project. One of the sources said Shazeer made hundreds of millions from his stake in Character as part of the deal, a sum the WSJ said is unusually high for a founder who didn't sell their company or take it public. PYMNTS has contacted Google for comment but has not yet gotten a reply. Meanwhile, Google announced this week that its generative AI solutions are now being used by more than 2 million developers. "We're inspired by what customers are building and excited how quickly they've been able to move ideas from experimentation into production with our Vertex AI platform," Thomas Kurian, CEO of Google Cloud, wrote in a blog post. "We're also seeing major boosts in productivity through Gemini for Google Workspace, with customers saving an average of 105 minutes per user, per week, according to our recent study of enterprise customers." The company also shared some examples of use cases of Google's generative AI solutions and the benefits they are delivering. For instance, the Indonesian FinTech GoTo Group developed an AI-based voice assistant that helps users of its GoPay app find and use features just saying what they wish to do.

Google Is Paying $2.7 Billion to Reportedly Rehire an Early Employee Who Built an AI Chatbot Before ChatGPT

Other big tech companies have made similar agreements recently. In August, Google entered a $2.7 billion agreement with AI chatbot startup Character.AI. The official reason? Getting a license to use Character's technology. The unofficial reason? According to a Wednesday Wall Street Journal report, the consensus within Google is that the tech giant primarily wanted to rehire a former employee who quit in 2021 after creating an AI chatbot that Google refused to take public. The engineer, 48-year-old Noam Shazeer, was one of the first hundred employees at Google. He quickly established himself as an AI expert and wrote a paper in 2017 with seven other Google employees called "Attention is All You Need" which introduced a new deep learning architecture. That paper has been cited by other researchers more than 100,000 times and established him as one of the inventors of modern AI. Related: Google Introduces Its New Project Astra AI Assistant at I/O Event -- Here's What Else You Missed Shazeer claims credit for his contributions: His LinkedIn "About" section at the time of writing reads, "I have invented much of the current revolution in large language models." In 2021, before the release of OpenAI's ChatGPT, Shazeer was working on AI at Google. He and his colleagues created an AI chatbot that could interact with users conversationally, and they advocated for Google to demo it to the public. Google refused multiple times and Shazeer quit to start Character, building up the startup from 2021 to the present with over $150 million in funding at a valuation of $1 billion as of March. Google's August agreement with Character brought Shazeer back into the company as part of the DeepMind research team, which works on AI. Shazeer made hundreds of millions of dollars as part of the deal, according to the WSJ. Related: Google Co-Founder Sergey Brin Is Back at the Company 'Pretty Much Every Day.' Here's What He's Working On. Other big tech companies have made similar agreements recently. In late August, Amazon signed a deal to non-exclusively license AI models developed by AI robotics startup Covariant and bring over Covariant's co-founders and some employees.

An AI 'genius' founded a startup that imitates celebrity voices. Google just paid him $2.7 billion

Google (GOOGL) has reportedly paid $2.7 billion to acquire a chatbot that allows you to talk to AI versions of celebrities. The whopping sum, however, also brings in the company's top employees -- including a former Googler. Noam Shazeer left Google in 2021 after the tech giant declined to release the chatbot he had developed. Now, he will help lead its AI initiative Gemini. Insiders at Google told the Wall Street Journal that while Google officially paid around nearly three billion dollars for the company, Character.AI, its reunion with Shazeer and his top brass was the greatest contributing factor to the final price tag. As of August, Character.AI had raised about $150 million and its last known valuation was around $1 billion. "I am so proud of everything we built at Character.AI over the last 3 years," Shazeer wrote in a statement to TechCrunch. "I am confident that the funds from the non-exclusive Google licensing agreement, together with the incredible Character.AI team, positions Character.AI for continued success in the future." The chatbot founded in 2022 allows you to talk to AI versions of famous people such as Elon Musk, as well as fictional personalities. Users can choose various roles and tones and even get practical advice. The platform has largely attracted users aged 18 to 24, who make up 56% of the website traffic, according to SimilarWeb (SMWB), a data intelligence platform. Early versions included language tutors and coding instructors, followed by a subscription-based model for faster response times and more pre-trained models. The platform, however, quickly became an outlet for romantic role-play. According to Time, many of the 18 million characters created on Character.AI are a mix of "absurdist, racy, or explicitly sexual." Despite the potential pitfalls of chatbots, Google executives have plans to spend $12 billion every quarter this year to stay ahead of the AI curve. Much of that spending is on startups founded by former Google employees -- like Shazeer's -- a process known as a 'reverse acqui-hire.' The process allows big companies to license the technology of smaller companies and hire some of their staff, without going through a full acquisition. In March, Microsoft (MSFT) paid $650 million in cash to strike a deal with Inflection, an OpenAI rival, that gave it access to the startup's models and most of its employees. That deal has since come under scrutiny by the Federal Trade Commission. Tech expert Scott Galloway said on his and tech journalist Kara Swisher's podcast Pivot in June that Microsoft took took the "heart and lungs" of the company. Swisher added: "There's gonna be lawsuits in the AI area... And there should be."