Meta and Elon Musk’s xAI compete for partnership with chatbot group Character.ai

The negotiations come as big technology companies seek partnerships with Silicon Valley artificial intelligence companies.

Meta and Elon Musk’s xAI have been vying for a partnership with chatbot maker Character.ai, while large technology groups with vast financial resources focus on Silicon Valley’s hottest artificial intelligence startups.

Facebook owner Meta recently held early discussions about a collaboration with Character.ai, which uses large language models to generate conversations in the style of multiple figures and personas, according to four people familiar with the matter.

The groups have discussed the possibility of their lead researchers working together on initiatives such as pre-training and model development, some of these people said.

The emerging group, which is backed by Silicon Valley venture capital firm Andreessen Horowitz, has also held exploratory talks with xAI about a similar partnership, two people with knowledge of the discussions said. However, the talks did not result in any agreement, these people added.

The interest in Character.ai is the latest sign of how leading technology groups are seeking to secure partnerships and investments in leading AI startups as they compete against each other to develop cutting-edge technology.

Meta announced in September that it was embedding AI chatbots with personas on Instagram, Facebook and WhatsApp, including several that take on the personas of celebrities like rapper Snoop Dogg. Meanwhile, xAI has developed its own chatbot, Grok, which is available to premium subscribers on X, the social media platform Musk also owns.

Discussions were focused on advancing research rather than an acquisition, one of the people said. Large technology groups have been cautious about attempting full acquisitions of AI startups for fear of regulatory action around the world.

Microsoft’s $13 billion alliance with OpenAI is being scrutinized by UK and US competition authorities, despite both groups insisting their partnership is not a merger.

Meta has also reached out to other AI companies about potential partnerships, said a person with knowledge of its strategy. These actions come as the platform intensifies its investments in AI and aims to become “the leading AI company in the world”, according to CEO Mark Zuckerberg.

Adept, an AI agent startup run by former OpenAI and Google AI developers, has also held talks with Meta about a sale or strategic partnership, according to a person familiar with the matter. News of the Adept deal was first reported by The Information on Wednesday.

Meta has taken a different approach than its biggest competitors in developing AI models. The company’s flagship models, Llama, are open source, meaning their source code is freely available to the public and developers who build on top of the platform. In contrast, OpenAI, Anthropic, and Google have developed proprietary “closed” models.

Meta’s models are a cheaper alternative for companies and developers, but investors have balked at the cost of keeping up with competitors. Last month, Meta lost nearly $200 billion in market value when Zuckerberg promised to increase spending on AI as part of his work toward developing artificial general intelligence — loosely defined as AI capable of outperforming humans in a range of tasks. .

Musk’s xAI is close to raising $6 billion in funding, which the serial entrepreneur hopes will help it gain ground on OpenAI, Google and Meta. He has talked about his desire to build “ultimate truth-seeking AI” and his pitch to investors is that access to data and expertise from his other companies — like Tesla and X — gives him an edge over rivals.

Noam Shazeer, founder of Character.ai and former Google researcher, was one of the authors of a 2017 article that proposed the transformer model, which serves as the basis for today’s best AI models.

According to a person who knows Shazeer, he is focused on building artificial general intelligence (AGI) and is looking for more resources to do so. Character.ai is also exploring partnerships with other groups, said a person familiar with its strategy.

Character.ai and Meta declined to comment. Musk did not respond to a request for comment.

By George Hammond and Hannah Murphy in San Francisco and Cristina Criddle in London for the Financial Times.