Google paid $2.7 billion to rehire AI genius who left the company to start a startup

According to a report, Google paid $2.7 billion to rehire an artificial intelligence genius who angrily left the tech giant three years ago to start his own startup.

Noam Shazeer, a 48-year-old software engineer who was hired as one of Google's first few hundred employees in 2000, left the company in 2021 after it rejected his request to release a chatbot he had developed with a colleague, Daniel De Freitas.

Shazeer and De Freitas went on to found Character.AI, which grew into one of Silicon Valley's hottest AI startups, eventually reaching a $1 billion valuation last year.

Last month, Google and Character.AI announced that Shazeer, De Freitas and certain members of Character.AI's research team would join Google's AI unit DeepMind.

At the time of the deal, Character.AI said it had more than 20 million monthly active users.

According to the Wall Street Journal, Google paid Character.AI $2.7 billion to license its technology and for Shazeer and his team to agree to work for the company.

The licensing deal, which does not yet constitute a full-fledged acquisition, is a unique agreement that allows Google to immediately access Character.AI's intellectual property without having to wait for the regulatory approvals and bureaucratic clearances that would have been required if it had fully acquired the company.

Shazeer's return to Google is widely viewed among the company's employees as the main reason for the acquisition of Character.AI, the Journal reported.

Eric Schmidt, former CEO of Google, was reportedly impressed by Shazeer – so much so that he was convinced he could create an AI model that could operate with human intelligence, according to the Journal.

“If I can think of anyone in the world who could probably do it, it's him,” Schmidt was quoted as saying about Shazeer during a lecture at Stanford University in 2015.

In 2017, Shazeer and another Google colleague, De Freitas, teamed up to develop Meena, a chatbot that can engage people on a range of topics.

According to the Journal, Shazeer was so convinced of Meena's usefulness that he predicted it would one day replace Google's search engine.

However, for safety and fairness reasons, Google officials considered it too risky to release Meena, the Journal reported.

Google named Shazeer, who received hundreds of millions of dollars in the deal, as one of three people who will lead the company's efforts to develop the next version of Gemini, Google's next-generation AI model designed to compete with rivals like OpenAI's ChatGPT.

Earlier this year, Google temporarily suspended Gemini's image generation feature after it produced inaccurate “woke” depictions, such as those of minority founding fathers and various popes.

Last month, Google lifted the ban and allowed users to create images using prompts after fixing the bugs.

The high price Google paid to bring back Shazeer and De Freitas is indicative of the expensive race among Silicon Valley tech giants to land the best talent in the age of artificial intelligence – especially after OpenAI launched ChatGPT.

The battle for the best talent has now become so fierce that Meta CEO Mark Zuckerberg and Google co-founder Sergey Brin have personally written messages to new employees urging them to come on board.

According to the Journal, Brin is the key figure in persuading Shazeer to return to Google.

Companies like OpenAI pay sought-after recruits compensation packages ranging from $5 million to $10 million – usually in the form of stocks.

Meta has earned a reputation for being quite stingy, offering salary packages ranging from one to two million dollars, according to data unearthed by technology-focused news site The Information.