Character.ai in talks to raise money or sell itself: report

[Meta AI, Claude, ChatGPT, Gemini, Grok, Perplexity, DeepSeek, Copilot and Character.AI. Assorted AI app icons]

Character.ai, the artificial intelligence startup, is in talks to either raise money to help keep the venture going or sell itself, The Information reported.

The company, which has been pushing [https://seekingalpha.com/news/4486327-character-ai-pushes-ai-friends-amid-safety-concerns-and-lawsuits-ft] the idea of AI native friends, has spoken to potential buyers, bankers, and employees about its next moves, the news outlet added [https://www.theinformation.com/articles/character-ai-talks-sell-raise-money-year-founders-depart], citing three people who spoke to company executives. If the company does indeed raise money, it could be a funding round of a few hundred million dollars that would value the company at more than $1B.

The company is on track to reach an annualized revenue run rate of $50M by the end of the year, the news outlet added.

A Character.ai spokesperson told Seeking Alpha the company does not “comment on rumors and speculation.”

Character.ai has been in flux for nearly a year, when Google (NASDAQ:GOOG [https://seekingalpha.com/symbol/GOOG]) (NASDAQ:GOOGL [https://seekingalpha.com/symbol/GOOGL]) hired [https://seekingalpha.com/news/4133546-google-hires-characterai-co-founders-will-license-its-ai-models] the co-founders of the AI startup last August. The search giant also said it would license the startup's large language models. Noam Shazeer, who co-founded Character.AI and was its Chief Executive Officer, rejoined Google, along with co-founder Daniel De Freitas. A few other employees of the firm also made the move to Google.

Last October, it was reported [https://seekingalpha.com/news/4155612-characterai-leaves-llm-building-behind-due-to-expense-report] that Character.ai CEO Dominic Perella told staff the company was abandoning the idea of building bigger and better large language models and would instead focus on improving its consumer products.

Character.ai reportedly [https://seekingalpha.com/news/4121137-characterai-held-talks-with-google-meta-xai-about-tie-ups-report] held talks with Google, Meta (META [https://seekingalpha.com/symbol/META]) and Elon Musk's xAI about research partnerships last year.

_(This story has been updated with Character.ai's response.)_

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