Character-Creating Startup Inworld AI Raises More Cash At $500M Valuation

Inworld AI, which uses generative AI to help developers create smart characters that can learn and perform their own actions, closed a fresh round of funding at a $500 million valuation.

While the round has not completely closed — that is expected later this month — the company said it will total $50 million-plus. The rounds includes some big investor names — Lightspeed Venture Partners, Stanford University, First Spark Ventures, Samsung Next, LG Technology Ventures and other existing investors.

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Inworld has now raised more than $100 million since being founded in 2021, per the company.

The Mountain View, California-based startup sits at the intersection of AI and gaming. It has developed a “Character Engine” to create non-playable characters for gaming and other interactive experiences using multiple machine-learning models.

Developers can use the platform to create characters that can learn and adapt, have memories and motivations, and even navigate relationships.

“The financial runway means we can take a long-term view when it comes to supporting the developer community today, and stay ahead of the curve in the ever-evolving landscape of generative AI for tomorrow,” said co-founder and CEO Ilya Gelfenbeyn in a blog.

Gaming funding slows

While Inworld’s platform can be applied to different use cases, there is no denying how it can be used in gaming — which has seen limited VC interest this year, according to Crunchbase data.

Funding to U.S.-based gaming startups hit a high in 2021 — like many other industries — topping more than $5 billion.

Last year, such startups saw about $3.8 billion invested, although $2 billion of that went to Epic Games in a massive round.

However, with more than half of 2023 gone, U.S.-based gaming startups have received just more than $400 million to date.

It’s likely AI’s applications to gaming will spur on more investment, but the industry has a long way to go to even come close to last year’s funding numbers.