Google paid $2.7 billion to rehire AI genius who quit after company refused to release his bot: report

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

Noam Shazeer, a 48-year-old software engineer who was first hired by Google as one of its first hundreds of employees in 2000, left the company in 2021 after it rejected his request to issue a chat bot he had developed with a colleague, Daniel De Freitas.

Shazeer and De Freitas went on to found Character.AI, which grew to become one of Silicon Valley’s hottest AI startups that would eventually reach 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 will join Google’s DeepMind AI unit.

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

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

The licensing agreement, which is short for an outright acquisition, is a unique arrangement that allows Google to immediately access Character.AI’s intellectual property without having to wait for the regulatory approvals and bureaucratic sign-offs that would have been required if the company was fully purchased.

Shazeer’s return to Google is widely seen among company employees as the main reason behind the acquisition of Character.AI, the Journal reported.

Eric Schmidt, the former CEO of Google, was reportedly impressed with Shazeer — so much so that he was convinced he would be able to build an AI model that could function with human-level intelligence, according to the Journal.

“If there’s anyone I can think of in the world who is likely to do it, it would be him,” Schmidt was quoted as saying of Shazeer during a speech at Stanford University in 2015.

In 2017, Shazeer and another Google colleague, De Freitas, teamed up to create Meena, a chatbot that can engage people on a variety of issues.

According to the Journal, Shazeer was so confident in Meena’s service that he predicted it would one day replace Google’s search engine.

But Google executives thought it too risky to release Meena because of security and justice concerns, the Journal reported.

Google chose Shazeer, who made hundreds of millions of dollars in the transaction, as one of three people to lead the company’s efforts to build the next version of Gemini, Google’s next-generation AI model that was built to compete with rivals such as OpenAI’s ChatGPT.

Earlier this year, Google temporarily suspended Gemini’s image-generating feature after it produced inaccurate “smart” depictions of the likes of minority founding fathers and various popes.

Last month, Google lifted the suspension and allowed users to create images using prompts after fixing 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 hire top talent during the AI ​​era—especially in the wake of OpenAI’s introduction of ChatGPT.

Talent wars have heated up to the point where Meta CEO Mark Zuckerberg and Google co-founder Sergey Brin personally write notes to recruits urging them to come on board.

Brin is said to be a key figure in helping convince Shazeer to return to Google, according to the Journal.

Companies like OpenAI pay prized recruits compensation packages ranging from $5 million to $10 million—mostly in the form of stock.

The meta has developed a reputation for being somewhat stingy, offering payout packages of $1 million to $2 million, according to data uncovered by tech-centric news site The Information.