Andreessen Horowitz leads $150 million funding round for character AI startup

Andreessen Horowitz leads $150 million funding round for character AI startup

AI has raised $150 million in a new funding round led by Andreessen Horowitz, which valued the AI chatbot startup at $1 billion, and it is in talks with cloud providers for more strategic investment, the company told Reuters.

The billion-dollar valuation for a company with zero revenue is another example of the continued AI funding boom since OpenAI's ChatGPT became a well-known name. It came amid the recent shockwaves caused by the collapse of Silicon Valley Bank.

According to PitchBook, AI investment in 2023 has surpassed the full-year amount of $1.5 billion in 2020.

AI will use funding to train its self-built models and expand its 22 person team.

Since its launch six months ago, Character has been around. The company said that AI, which enables users to create customized AI companions with specific personality and values, already has 100 million monthly site visits, which is a similar trajectory to that of ChatGPT, which set a record for the fastest-growing user base when it reached 100 million monthly users in two months.

The average time spent on the site is more than two hours a day, according to Character. The Menlo Park, Calif. based company is launching a new model that adds more productivity capabilities, including drafting emails and assisting with test prep, on top of its current use cases such as entertainment, roleplay and emotional support.

A billion people can make billions of use cases, and that's why we started the company, said Noam Shazeer, CEO of Character. Character is not currently generating any revenue. He didn't rule out an ad-supported model.

Character was founded by former Google researchers Noam Shazeer and Daniel De Freitas in 2021. The former CEO of GitHub, Nat Friedman, was among the people who were attracted to AI.