--- title: "AI Company With Zero Revenue Raises $150 Million" description: "A 16-month-old AI chatbot startup called Character.ai just reached a $1 billion market cap — despite having yet to generate any revenue." date: "2023-03-25" modified: "2023-03-25" authors: - name: "Maggie Harrison Dupré" job_title: "Senior Staff Writer" link: "https://futurism.com/authors/mharrison" url: "https://futurism.com/the-byte/ai-company-no-revenue-fundraising" categories: - "Artificial Intelligence" tags: - "ai" - "tech industry" - "the digest" - "venture capital" --- # AI Company With Zero Revenue Raises $150 Million ![A 16-month-old AI chatbot startup called Character.ai just reached a $1 billion market cap — despite having yet to generate any revenue.]() *\Image: Getty / Futurism\* ## Profit, Shmofit With the help of a brand new $150 million dollar cash infusion from Andreessen Horowitz, a 16-month-old AI chatbot startup called Character.ai just reached a $1 billion market cap — despite having yet to [generate any revenue](). Founded by two ex-Googlers, the idea is to host various AI-powered personalities, from celebrities to anime characters to Twitch streams to historical figures and more, all of whom users can interact with via text. Wanna ask AI Taylor Swift what her favorite song is? Albert Einstein what his greatest accomplishment was? Go for it, kid. But giving users the means to "chat" with algorithmic celebs doesn't really appear to be Character.ai's billion-dollar get. Rather, the app is marketed as an alternative to Replika — yes, [that Replika]() — by providing users with a space to build and chat with customizable, AI-powered companions. "Character.ai's power is our highly-sophisticated language model, which rapidly analyzes and contextualizes large volumes of information to produce useful intelligence tailored to each individual," company CEO Noam Shazeer said in a [press release](), "making it a personalized superintelligence companion that enhances productivity, offers advice, educates, and entertains." "The potential use cases," he added, "are infinite." ## Lessons Learned "Superintelligence" feels like a marketing stretch, but we digress. You heard 'em, folks — personalized, pocket-sized AI Tamagatchis for all! Replika became fairly successful, so it's not the most out-there thing in the world to see the extremely [AI-optimistic folks]() at the Andreessen Horowitz firm put some cash into Character.ai. Still, Replika has dealt with some pretty serious issues, on the tech side as well as on the side of its users. After discovering that in a number of cases, users were [verbally and sexually harassing]() the AI programs [*and vice versa*](), the sexual component of the app — an expected function of AI like this, whether explicitly offered by the company or not — was [shut down](). So, you know, learning lessons. As far as the profit piece goes, the makers of the app — which is currently free — did [tell *Reuters*]() that they plan to soon launch a subscription model as a secondary option to the free version. They're also reportedly considering an ad model. But if the last few months in Silicon Valley have demonstrated anything, it's that you can just [whisper the word AI into the wind]() and rake in millions. Who needs to sell to consumers, when at least for the time being, you can just [sell to VCs]()? **READ MORE:** [*A 16-Month-Old Chatbot Startup With No Revenue Is Now a $1 Billion Unicorn*]() \[*The Washington Post*\] ## Author At Futurism, I've reported extensively on the rise of AI as a cultural and business force shaping the media industry, and more broadly how those dynamics are changing how we all consume and share information and relate to one another. I'm also fascinated by public health policy and ethics, the role of emerging tech in politics and governance — and the powerful people and forces at those intersections — climate change, and the environment. My investigation on Sports Illustrated's use of AI-generated authors with fictional biographies won a 2024 Mirror Award for "Best Story on Media Coverage of Artificial Intelligence in Journalism and the Media" from Syracuse University's SI Newhouse School, I contributed to Niemen Lab's 2025 Predictions for Journalism series, and I've discussed my work for Futurism during appearances on NPR, CNN, the BBC, the CBC, and more. I grew up in rural Pennsylvania and attended the University of Massachusetts Amherst, where I played Division I field hockey for the Minutewomen as a midfielder. Since then, I've lived in New Orleans, Louisiana and Manhattan, New York. I spend my free time running, reading, perusing archival fashion, and searching for the world’s best negroni. I also have a debonair tuxedo cat, Westley, who's named after "The Princess Bride." ### Author social links [Bluesky]()