(Bloomberg) -- Elon Musk’s xAI has discussed acquiring artificial intelligence chatbot startup Character.AI, according to people familiar with the matter.
Musk’s xAI approached the startup about a deal, said one of the people, all of whom asked not to be identified discussing private information. It wasn’t immediately clear if the talks had progressed, or if a deal has been seriously discussed.
A representative for Character.AI said “we don’t comment on rumors and or speculation.” XAI did not respond to a request for comment.
Character.AI last year was said to be in fundraising talks at a valuation of more than $5 billion. Meanwhile, Musk has raised huge sums for xAI — bringing in about $6 billion for the startup at a valuation of $24 billion.
The Information earlier reported that xAI has considered buying Character.AI, a report that Musk later denied in a post on X, the social media platform he owns.
A deal between xAI and Character.AI would more closely link the startup with Grok, the marquee product of xAI. Grok, now available on the social platform X, aims to be an unbiased and lighthearted interlocutor, according to Musk. “We want to try to be the funniest AI,” Musk has said.
Character.AI was founded in 2021 by Noam Shazeer and Daniel De Freitas. Both are alums of Google, and Shazeer was a co-author on a seminal paper on generative AI, making him a celebrity in the AI industry.
The startup’s service lets anyone make their own customized chatbot, impersonating anyone and anything — living, dead or imaginary. People have made millions of chatbots, or “characters,” with the product. Some of the bots are popular conversation partners: For instance, users have sent about 371 million messages to Raiden Shogun and Ei, a bot that mimics a character in the video game Genshin Impact.
--With assistance from Rachel Metz.
(Updates to add that Musk denied earlier report of xAI’s interest in Character.AI.)
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