Circle Labs: The Shape of AI-powered Friends to Come

Why Lightspeed is leading an investment in Circle Labs, a platform that enables anyone to become a creator of unique, virtual characters powered by AI

By Michael Mignano & Faraz Fatemi

A new AI revolution is upon us, and it is no longer a secret. In a matter of only a few months, recent LLM (large language model) breakthroughs have propelled AI from a niche trend to the dominating force behind much of the tech startup landscape.

However, unlike other recent hype trends of the past few years, the value of AI has quickly become clear, showing us all how photos, writing, video, and other forms of creative media will vastly evolve in the coming years. Generative AI has the potential to transform content creation and consumption across industries including social media, gaming, immersive reality, entertainment, commerce, among many other consumer categories.

However, while much of the world’s attention has been focused on AI’s impact on creative media in recent months, one of the earliest use cases of AI stands to also greatly benefit from recent tech advancements: AI-powered bots, or non-playable characters (NPCs).

Investing in Circle Labs

Today, Lightspeed is announcing that we’re leading a $4.2M seed round in Circle Labs, a platform that enables anyone to become a creator of unique characters powered by AI.

We couldn’t be more excited to back Circle’s incredible team, led by founders Anushk Mittal and Noorie Dhingra, alongside an amazing group of forward-thinking supporting investors like Haystack, Scott Belsky, and AI Grant Fund.

With this investment, Lightspeed is doubling down on our belief in generative AI, alongside our recent investments in Stability AI and others soon to be announced. While today is a continuation of our multi-decade strategy of investing in companies at the forefront of Artificial Intelligence, such as Snorkel AI, Moveworks, Fiddler Labs, Glean, ThoughtSpot, AppZen, and Yellow AI, we believe companies like Circle Labs represent a new frontier for how AI will shape consumer applications of the future.

The evolution of NPCs

NPCs were one of the earliest consumer-facing use cases of AI on the internet. Nearly a decade ago, they began showing up as virtual agents with greater frequency in customer support chats, interactive characters in video games, and even as virtual friends. However, these early-AI NPCs were often primitive. They rarely understood the intent behind our communications. They often blurted out incoherent responses to our prompts. They were mere assistants, and their value most often paled in comparison to the proposition they offered.

But there’s a big difference between the NPCs of old and the ones gaining traction today: the technology is now insanely good and makes conversations high-quality, human-like, and fun. Today’s NPCs are knowledgeable. They’re comedic. They have their own unique personalities. Since the LLMs powering them are based on a snapshot of the total internet, they know real things and have the ability to teach us. They even make us feel like we’re not alone. When you interact with the NPCs of today, one thing becomes clear: it’s not too dissimilar from interacting with a human.

But where will we actually talk to NPCs? Very few consumers spend time in developer tools or consoles, testing out the latest version of GPT·3. And no one wants to talk to customer support chatbots all day.

The answer seems inevitable: we’ll talk to NPCs where we already talk to humans online today. Every single day, each of us are communicating in greater amounts and with greater frequency than ever before on social media, messaging tools, or community platforms like Discord, Twitch, Twitter, WhatsApp, and Instagram.

Meet the main characters of Circle Labs

Anushk and Noorie, the founders of Circle Labs, have been pondering the above questions, and potential solutions, for some time now. Through a series of iterations, vetted hypotheses, rapidly shipped product updates, and an emerging social culture around Discord communities, they’ve built a new type of creator platform that lets anyone generate their own AI-powered NPCs (or as they call them, Shapes).

Circle Labs co-founders Noorie Dhingra and Anushk Mittal (from left)

Once created, Shapes can be deployed across every social/communication platform (Discord, Twitter, Instagram, etc.) with persistent, cross-platform memory. In other words, just as you make new human friends and hang out with them across different social platforms, you will do the same with Shapes.

Shapes can be anything. They can be built with a base-level of personality, context, and intelligence that grows and persists as the Shape has more interactions. Today, creators using Circle Labs’ tools are most often making AI friends that anyone in Discord communities can interact with. However, over time, it’s easy to see how Shapes can fill a vast array of use cases.

A Shape can be a rendition of your favorite anime or video game character. It can be a virtual twin for your favorite YouTuber. It can be an AI representation of your favorite brand’s mascot, tweeting on behalf of that brand. And it can even be an AI version of you, ready to jump in on your own conversations when you’re not available. It’s not hard to imagine a world 10 years from now in which most of the world’s AI-enabled NPC interactions will be powered by Circle Labs.

The promise of Circle Labs

The Circle Labs team has been vetting the above product in closed beta for the past few months, with a critical mass of creators requesting access to the creator tool. What’s more, community members have already interacted with Shapes enough to trigger millions of messages over the short, several month duration that the product has been in beta. We believe this head start in an emergent market will further enrich the conversation datasets which power Circle’s NPCs, and serve as a competitive moat over time.

Given the speed at which AI is improving and the volume of collective communication which is now taking place online, it seems inevitable that AI-powered NPCs will be persistent across all of our communication channels in only a few years’ time.

And by designing a creator-first approach that enables anyone on the planet to build, deploy, and scale Shapes with ease, it’s clear to us that Circle Labs will serve as the foundation of many of the world’s digital conversations — and even friendships — in a not-so distant future.

Are you interested in helping shape the future of AI and communication? If so, good news: Circle Labs is hiring. Reach out to founders@circlelabs.xyz to inquire about engineering, product, and marketing roles.

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Michael Mignano

Michael Mignano

Co-Founder, Anchor and angel investor to 50+ startups. Former head of talk audio at Spotify.