New startup offering custom chatbot creation raises $150 million in investments

The startup that allows people to create their own chatbots, Character.AI, has raised $150 million in an investment round led by the venture capital firm Andreessen Horowitz, surpassing investor estimates of $1 billion.

The company’s technology enables users to create chatbots that can take on various personalities, from U.S. President Joe Biden to Super Mario. This is the latest startup active in the field of artificial intelligence (AI) to raise a significant amount of money, demonstrating ongoing investor interest in the AI industry just two weeks after the collapse of Silicon Valley Bank (SVB) led to a rapid unraveling of the venture-backed startup world, Bloomberg reported.

Sarah Wang, general partner at Andreessen Horowitz, will join the company’s board as part of the agreement between the fund and the startup. The announcement of Character.AI comes a week after another major funding deal for the AI startup, Adept. Adept announced that it raised $350 million from General Catalyst and Spark, as well as SV Angel and A.Capital, who also invested in Character.AI.

Character.AI initially sought to raise $250 million, Bloomberg reported in January. Noam Shazeer, the CEO of the startup, said in an interview that the company has 22 employees, of which 21 are engineers. The new funding will help grow the Character.AI team and other types of roles, they announced.

When asked whether the startup kept its funds in SVB, Shazeer said that its failure ‘did not impact fundraising’ and that ‘all our cash is safe.’

Shazeer stated that Character.AI plans to start experimenting with charging users, possibly for a premium subscription to its product.

– The best way to grow the business will be to fund ourselves directly from users, by delivering something valuable to a large number of people – he concluded.