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

Google paid $2.7 billion to rehire an artificial intelligence genius who left the tech giant in a huff 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 few hundred employees back in 2000, left the company in 2021 after it refused his request to release a chat bot that 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 the hottest AI startups in Silicon Valley 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 would be joining Google’s AI unit DeepMind.

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

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

The licensing deal, which is short of a full-fledged 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 bought outright.

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

Eric Schmidt, 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 operate with human-level intelligence, according to the Journal.

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

In 2017, Shazeer and another Google colleague, De Freitas, teamed up to create Meena, a chat bot that could engage humans on a range of issues.

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

But Google executives thought it was too risky to release Meena due to concerns about safety and fairness, the Journal reported.

Google tapped Shazeer, who netted hundreds of millions of dollars in the transaction, to be one of three people who will 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 “woke” depictions such as minority founding father and diverse popes.

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

The steep price that Google paid to bring Shazeer and De Freitas back into the fold is indicative of the expensive race among Silicon Valley tech giants to hire the best talent during the AI era — particularly in the wake of OpenAI’s rollout of ChatGPT.

The talent wars have heated up to the point where Meta CEO Mark Zuckerberg and Google co-founder Sergey Brin personally wrote notes to recruits urging them to come aboard.

Brin is reportedly the key figure in helping to persuade 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.

Meta has developed a reputation for being somewhat stingy, offering pay packages of between $1 million and $2 million, according to data unearthed by the tech-centric news site The Information.