Google reportedly paid $100 million to acquire AI avatar company Alter to ramp up competition with TikTok

Google reportedly acquired the AI avatar company Alter for $100 million. The move is expected to help Google compete better with social media juggernaut TikTok.

TechCrunch reported that Google and Alter's deal was made two months ago, but the companies decided not to announce the deal. Following the report, though, Google confirmed it bought Alter but did not say if the $100 million amount was accurate.

Reports also noted that Alter executives, including co-founder and COO Jonathan Slimak, have apparently changed their career information on LinkedIn. Engadget noted that Slimak's page now says he is working on "Avatars" in Google.

Alter launched as an AI avatar startup named Facemoji. It raised $3 million in seed funding last year from investors, including Twitter.

The same report said Google acquired Alter to improve its content offerings and to better compete with TikTok. But it is unclear how the acquisition will specifically benefit Google's other major products and subsidiaries. However, with the mention of Google's competition with TikTok, Alter may eventually help Google by improving content creation tools for YouTube's short-form videos called Shorts.

TikTok continues to dominate as a short-form video-sharing platform, but Google has seen early successes following the global rollout of YouTube Shorts last year. Speaking to investors during Google's Q1 2022 earnings call last April, CEO Sundar Pichai said Shorts was already garnering an average of 30 billion daily views.

Google SVP and chief business officer Philipp Schindler also said at the time that Google has already started testing playing ads on YouTube Shorts content, which ultimately launched the following month. Before ads were added, Google also set up a $100 million YouTube Shorts Fund to encourage creators to post their content on the platform. Google soon introduced more ways to monetize YouTube Shorts, including "shoppable ads" that also launched earlier this year.

With YouTube Shorts shaping up to Google's direct response to TikTok, it would not be surprising if it benefits the most from the acquisition of Alter. Google has also recently updated the YouTube app so that users can easily browse through Shorts content. YouTube now has dedicated tabs for long-form videos and Shorts that users can find when they open a creator's channel page.

Photo by Arthur Osipyan (@arty_nyc) on Unsplash