Lauren Goode: Let’s say that you wanted to buy an AI company here at WIRED, but forces bigger than us wouldn’t let that happen. Just on account of the fact that WIRED is too darn powerful, and it would be an unfair advantage.
Michael Calore: I can’t foresee that ever happening, because I do not want to buy an AI company.
Lauren Goode: OK. But let’s say that you did want to acquire one because you thought this company was really unique, but your purchase was going to be declined. What would you do?
Michael Calore: In that case, I would probably just ransack all of their best talent and bring them here, right? Is that the right answer?
Lauren Goode: That is the correct answer. Yes.
Michael Calore: OK. I’m guessing that there are all kinds of corporate gymnastics involved in doing that. But if anyone is going to hashtag innovate around this space, it’s probably the big tech companies.
Lauren Goode: You are two for two.
Michael Calore: All right. Let’s make it three. Is this what we’re going to talk about on this week’s podcast?
Lauren Goode: Let’s do it.
Michael Calore: All right.
[Gadget Lab intro theme music plays]
Lauren Goode: Hi, everyone. Welcome to Gadget Lab. I’m Lauren Goode, a senior writer at WIRED.
Michael Calore: And I’m Michael Calore. I’m WIRED’s director of Consumer Tech and Culture,
Lauren Goode: And we’re joined this week by WIRED’s senior writer, Paresh Dave. Paresh, thanks so much for being here And by being here, I mean for all of us walking three feet from our desks into the studio.
Paresh Dave: I’m glad no one sued me from being aqui-hired onto your show today.
Lauren Goode: I’m very excited to have you. So a few days ago, Google, in a somewhat unusual move, said it was going to pay out $2.5 billion to venture capitalists who had invested in a startup called Character.AI in order for Google to basically buy back the talent of that startup. The founders of Character.AI, Noam Shazeer and Daniel De Freitas, had worked at Google before, and this new deal brings them back into the fold there.
The deal also means that Google gets a non-exclusive license for Character.AI’s artificial intelligence tech. This is definitely a kind of maneuver. It’s not an acquisition, but it’s more like an aqui-hire with some technology partnerships included. And it’s not the first of its kind we’ve seen in recent months. So later in this show, we’re going to 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 acquires.
Paresh Dave: Some might call it a trend. Others might call it a game of copycat. So Microsoft started this first when it acquired Inflection AI, or not acquired, but sort of acquired. Then Amazon did it with Adept AI. And now, we have Google doing it with Character.AI. And I think these are all companies that have former Googlers as cofounders, and they were all trying to compete with OpenAI and develop things kind of like ChatGPT, but not quite. So in character’s case, they were trying 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 the large language models that underlie those chatbots. And there’s only so much money out there, Lauren.