Character AI
8/2/2024
Thoughts on Noam Shazeer's return to Google from Character AI.
On August 2, 2024, it was announced that Noam Shazeer and part of the Character AI team joined Google in an acquisition deal reminiscent of Inflection's deal with Microsoft.
I spent time building a competitor to Character AI, so I wanted to share some thoughts on the news.
Character AI was early to the AI chatbot space, but being first isn't always enough to secure victory. In retrospect, they may be viewed as the eWorld or MySpace of AI characters - pioneers who paved the way but ultimately lost out to more adaptable successors.
While Character AI correctly identified a compelling use case for large language models, they misjudged where the bulk of user engagement would come from. Instead of intellectual conversations with historical figures or scientists, the platform found its niche among younger users seeking companionship, romantic interactions, and roleplaying scenarios.
The team behind Character AI is undoubtedly brilliant, comprised of seasoned researchers and engineers. However, it's questionable whether they truly empathized with or felt comfortable catering to the primary use cases that emerged on their platform (especially the romantic and companionship use cases).
Despite these setbacks, I still believe that AI character chat represents an opportunity on par with Facebook or Instagram in terms of potential impact and user base. However, the company that ultimately dominates this space may not be led by established tech veterans, but rather by a new generation of entrepreneurs who intimately understand and resonate with the core user base.
The winning formula for an AI character chat platform might look something like this:
- A scrappy, young founder who genuinely connects with the target audience and use case
- A humble beginning, perhaps in a college dorm room, bootstrapped with minimal initial funding
- Leveraging the latest affordable AI models rather than investing heavily in proprietary fine-tuning or training
- Developing a product format that can organically grow from early adopters to mainstream users
In essence, the future of AI character chat may be shaped not by the most technically proficient team, but by those who best understand and cater to the evolving desires of their users.