Virtual humans aim to put a face on AI. Literally.

Companies like Soul Machines are attempting to combine lifelike avatars with the latest generative AI.
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Francis Scialabba

· 5 min read

Those looking for a job with beer giant Heineken now have a new guide to fielding recruitment questions. Its name is Charlie, a friendly digital persona in a brand-green polo with a lifelike appearance that nevertheless situates it somewhere in the uncanny valley.

Other members of Charlie’s virtual cohort direct lost passengers from kiosks at the Dallas-Fort Worth International Airport or answer wellness questions on behalf of the World Health Organization.

These “digital humans” are the product of New Zealand-based Soul Machines, which aims to merge lifelike graphics with artificial intelligence to create representatives for businesses and celebrities. It’s one of a handful of startups aiming to put a face on the latest AI advances—no matter how eerie some may find the virtual visages.

While the idea for these kinds of virtual humans has persisted for at least a few years now, Soul Machines co-founder and CEO Greg Cross hopes the newfound hype around large language models (LLMs) like OpenAI’s ChatGPT will help breathe new life into the concept.

Soul Machines recently added ChatGPT to its studio for clients to integrate into the personas they create, and Cross claimed that client companies have been experimenting with that feature, though none he was willing to name publicly.

“This truly demonstrates the aliveness of our digital people and the way in which you can create these incredibly natural conversations—or the potential for these incredibly natural conversations—with ChatGPT,” Cross told Tech Brew.

Like many other technologists looking to apply generative AI to consumer applications, Cross’s team is concerned with how to best ensure the AI works as intended. Cross said the company is currently working to give clients tools to create guardrails, which can help businesses feel more comfortable with the idea of chatbots speaking on their behalf in marketing, sales, and customer service contexts.

The personas are trained to steer clear of controversial subjects, Cross said, and existing content from the business is uploaded as training data to make them more helpful. The avatars are already designed to attempt to read and respond to facial expressions via camera.

Cross hopes the addition of generative AI will eventually lead to new lines of business for Soul Machines.

“Our pitch has really hit a sweet spot at the moment,” Cross said. “To bring generative AI or GPT to life in the most humanlike way possible is a huge opportunity—because everybody in the world is playing with ChatGPT in some way, shape, or form.”

A business model in need of a boost

While Soul Machines raised $70 million last year and is working with Heineken and IBM, virtual avatar startups have historically been a tough business, according to Michael Dempsey, managing partner at VC firm Compound.

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Dempsey, who specializes in early-stage investing in emerging tech, previously researched and wrote about startups that crafted and operated digital personas online. But the business model struggled to achieve the type of scale required for venture capitalists to take serious interest in the tech, he said.

Many of these earlier attempts centered on building influencer personas for advertising purposes that would essentially compete with real influencers and other media for attention. Those virtual influencers demanded a constant stream of attention-grabbing content that didn’t always pay off in terms of monetization, Dempsey said.

“It’s something that really didn’t live up to the hype,” he said.

Dempsey said the new wave of generative AI advances currently captivating the tech world will probably lead companies to try virtual persona technology again over the course of the next few years.

“In some ways, the waves of what we’re seeing now on the AI side, which helps creators scale visual content…is the type of thing that could have helped a lot back then, and I think it was just a little early,” Dempsey said.

Changing economics

Shep Ogden, whose website keeps tabs on the virtual human industry and has created avatar personas in the past, said generative AI and other tech tools are lowering the barriers to entry into the space, but it remains costly.

“A year or two ago, it was really, really, really expensive,” Ogden said. “To create one of these, you had to spend a lot of time doing 3D creation of the environment, [and] 3D asset creation of the avatar, virtual human, or virtual influencer. And then you had to use some really expensive equipment to actually power them.”

Ogden said those that have sought his expertise include consumer-packaged good companies interested in launching virtual mascots, movie studios creating marketing campaigns, and fashion brands looking for virtual influencers.

That said, the plummeting metaverse hype, as well as tightening budgets amid recession fears, led to steep drops in how much money companies were willing to commit to experimental projects like these, he said.

“What we’ve seen is, interest is the same—there’s so much interest—but budgets are totally changed,” Ogden said.

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