Eye On AI: Following in Microsoft鈥檚 Footsteps, Google Seems Ready To Test Regulators In AI Race

This column is a look back at the week that was in AI. Read the previous one here.

As the generative AI race gets hotter and hotter, it seems like Big Tech is begging the government to get more involved.

Just a couple weeks ago we discussed 鈥檚 machinations to try to avoid more antitrust scrutiny, even as it announces deal after deal in the AI space. This includes its very unusual relationship with generative AI startup which is now being

Well, there was more this week 鈥� this time from good friend .

The search titan came to a 鈥渘on-exclusive鈥� licensing agreement with AI chatbot startup for its LLM technology, and also brought the company鈥檚 co-founders back to Google 鈥� where they were before starting Character.ai.

The strange part of the deal is it is being that Character’s staff was told investors would be bought out at a $2.5 billion valuation 鈥� a nice uptick from the $1 billion the company was valued at after closing a $150 million Series A led by .

The odd part isn鈥檛 the valuation 鈥� it鈥檚 the fact this is being structured as anything but an acquisition.

Investors are being bought out, a licensing agreement for the satrtup鈥檚 technology is in place, and co-founders are leaving to join the licensee 鈥� but it鈥檚 not an acquisition?

AI has seemingly made venture capitalists lose some touch with reality when it comes to valuations, and apparently it is making corporations get very, shall we say, 鈥渃reative鈥� in how they structure deals.

It seems reasonable to expect this deal to garner the same amount of scrutiny the Microsoft/Inflection deal did, regardless of how anyone is trying to frame the optics.

Of course, Google has bigger fish to fry now that it has been found to have . Nevertheless, the search giant may soon find a new wave of regulators looking at it closely.

Things that caught our eye and other stuff:

We knew it couldn鈥檛 be that easy. Earlier this year, filed a against and its executives 鈥� including co-founder and CEO 鈥� for allegedly breaching the founding agreement of the company to develop artificial general intelligence for the benefit of humanity. Just a few months later, Musk unexpectedly dropped the lawsuit. Now 鈥� he鈥檚 back again. In the revived , the mercurial Musk says he was manipulated into believing OpenAI would be a nonprofit and he was deceived in helping fund the company and attract talent. Like most things with Musk, just give this two or three months, and it likely will pass.
Investors continue to put money into Chinese OpenAI competitors as the country tries not to fall behind in the generative AI race. has closed on a fresh $300 million from the likes of at a valuation of $3.3 billion, . Earlier this year it was China鈥檚 artificial intelligence startup raised more than $1 billion in a funding round led by and HongShan, formerly . Just last month, Tencent and Alibaba contributed to China-based generative AI startup 鈥檚 $700 million round.
New York-based raised $5 billion across two new funds to look at new AI opportunities, per . The funds include a $4 billion growth fund and $1 billion for early-stage investments. The firm, co-founded by , has recently made big bets on film studio and cybersecurity firm