Lauren Goode: Let’s say you wanted to buy an AI company here at WIRED, but forces greater than us wouldn’t let you. Simply because WIRED is too powerful and it would be an unfair advantage.
Michael Calore: I don’t foresee this ever happening because I don’t want to buy an AI company.
Lauren Goode: OK. But let’s say you wanted to buy one because you thought this company was really special, but your purchase was rejected. What would you do?
Michael Calore: In that case, I’d probably just plunder all their best talent and bring it here, right? Is that the correct answer?
Lauren Goode: This is the correct answer. Yes.
Michael Calore: OK, I suppose all sorts of corporate gymnastics are needed to accomplish this. But if anyone is going to exploit the hashtag innovate in this space, it’s probably the substantial tech companies.
Lauren Goode: You are two against two.
Michael Calore: Okay. Let’s do that three times. Is that what we’re going to talk about on this week’s podcast?
Lauren Goode: Let’s do this.
Michael Calore: All right.
[Gadget Lab intro theme music plays]
Lauren Goode: Hello everyone. Welcome to Gadget Lab. My name is Lauren Goode, a senior writer at WIRED.
Michael Calore: And I’m Michael Calore. I’m the Director of Consumer Tech and Culture at WIRED,
Lauren Goode: Joining us this week is WIRED senior writer Paresh Dave. Paresh, thanks so much for coming. And by coming, I mean all of us who walked three feet from our desks to the studio.
Paresh Dave: I’m glad no one sued me for being invited on your show today.
Lauren Goode: I’m so cheerful to have you. A few days ago, Google, in an unusual move, said it would pay out $2.5 billion to venture capitalists who invested in a startup called Character.AI, so that Google would essentially buy the startup’s talent. The founders of Character.AI, Noam Shazeer and Daniel De Freitas, were both former Googlers, and this recent deal brings them back to the company.
The deal also means that Google gets a non-exclusive license to the Character.AI AI technology. It’s definitely a maneuver of sorts. It’s not an acquisition, but rather an acquisition with some technology partnerships. And it’s not the first time we’ve seen this in recent months. So later on in this show, we’ll talk about how regulators are really cracking down on Google in particular. But first, Paresh, tell us what’s going on with this trend of AI startup acquisitions.
Paresh Dave: Some would call it a trend. Others would call it a game of imitation. So Microsoft started this first when they acquired Inflection AI, or they didn’t acquire it, but they kind of acquired it. Then Amazon did it with Adept AI. And now Google is doing it with Character.AI. And I think all of these companies have ex-Googlers as co-founders, and they’ve all tried to compete with OpenAI and develop things like ChatGPT, but they haven’t quite done it. So in the case of Character, they’ve tried to build chatbots based on people and characters. So everything from Socrates to anime characters to Elon Musk, and they’ve all had to raise tons and tons of money to develop immense language models that underpin these chatbots. And there’s only so much money, Lauren.