Character.AI, founded by some of Google's heavy hitters, is a $1 billion chatbot startup fighting waifus and copyright issues.
Founded in November 2021 by Noam Shazeer and Daniel De Freitas, both former Google engineers, Character.AI hosts a staggering 16 million bots and receives more than 200 million visits per month. The app, which is available on both iOS and Android, has approximately 5 million users. Shazeer is one of the creators of the Transformer architecture that now powers AI models such as OpenAI's ChatGPT. He also worked with De Freitas on the now infamous LaMDA chatbot, which then-Google employee Blake Lemoine claimed was sentient.
At launch in November 2021, the platform's AI chatbots were designed for a variety of purposes, including travel planning, programming advice, and language tutoring. However, the user community has reshaped that vision, populating the platform with chatbots that range from surreal to realistic to fictional characters. The platform hosts user-generated chatbots that resemble popular characters such as Disney's Mickey Mouse, Marvel's Tony Stark, and even Chinese President Xi Jinping.
"We're going to replace your mom"
“I joke that we’re not going to replace Google. We’re going to replace your mom,” Shazeer said in an interview this spring, but clarified, “We don’t want to replace anybody’s mom.”
However, many users seek romantic relationships with the AI chatbots, creating friction with the company's policy against sexually explicit content. A large portion of users use the site for "romantic role-playing," and there is strong user support for removing the anti-pornography filter. Shazeer even found one of them protesting outside his Palo Alto home earlier this year. The protester's message: "Free the waifus," a term typically used to describe female characters in erotic manga and anime.
Character.AI also faces content moderation challenges, as user-generated content can often evade filters and raise issues of racism and ethnic stereotyping.
Character.AI battles copyright issues
In addition to these challenges, the company faces potential copyright and trademark issues. User-generated characters often resemble existing film and television characters, including 20 different versions of Mickey Mouse, the intellectual property of Walt Disney Co. This could potentially lead to claims for damages.
Despite the many challenges and risks, the co-founders of Character.AI see their startup as a democratizing force in AI technology. They want to provide users with companionship when they need it. “Our job is to just deliver technology direct to users,” Shazeer said. “They can decide what to do with it.”
In May, the company launched a $10-per-month subscription service, c.ai+, that offers users perks like skipping waiting rooms and faster message generation.