Google licenses Character.AI's technology and rehires Noam Shazeer

Background

Character.AI was co-founded in 2021 by Noam Shazeer and Daniel De Freitas, who left Google to start the company ^[1]. Shazeer was its co-founder and chief executive ^[1].

The deal

In August 2024, Google signed a non-exclusive agreement to use Character.AI's technology and hired Shazeer ^[1]. The two companies said on Friday 2 August 2024 that Shazeer and De Freitas were joining Google's AI unit, DeepMind ^[4]. TechCrunch reported the same day that Google had signed a non-exclusive agreement with Character.AI to use its technology ^[3]. Character.AI said it would give Google a nonexclusive licence for its current large language model technology ^[4]. De Freitas was not the only other arrival: some other employees of the startup joined Google as well ^[3].

Key details

Google paid a reported $2.7 billion to license the technology ^[1]. On the Google side, Shazeer returned to co-lead the Gemini project as a technical lead, alongside Jeff Dean and Oriol Vinyals ^[1].

On the Character.AI side, the company's general counsel, Dominic Perella, became interim CEO ^[3]. The startup continued to operate independently ^[2]. Karandeep Anand later became CEO ^[2], and by October 2026 Colin Adams held the role, after Anand joined Disney ^[5].

What kind of deal this is

A licence lets one company use another's technology without buying the company that built it, and a non-exclusive licence leaves the original owner free to keep using that technology and to license it to others as well. Large language models — the systems trained on text to generate and work with language — are expensive to build, so licensing an existing one is an alternative to developing a model from scratch. That is what makes this arrangement different from an acquisition: Google obtained a right to use Character.AI's technology and brought in the people behind it, while Character.AI stayed a separate company ^[2].

Why it matters

The deal put Shazeer back inside Google and into a lead role on Gemini, the model project he now works on together with Jeff Dean and Oriol Vinyals ^[1]. It also left the startup to rearrange its leadership: a general counsel stepped in as interim chief executive at the time of the announcement ^[3], and a permanent chief executive was appointed later ^[2]. The reported $2.7 billion payment was the figure attached to the licensing side of the arrangement ^[1]. Together these two elements — a licence of the technology and the hiring of its founders — are the substance of what the companies announced in August 2024 ^[1][4].