Character.ai has initiated voluntary Chapter 11 bankruptcy

drewbitt

2 years in, the founders and 30 researchers took Google's $2.7b and left. Then they had to ban kids which was probably most of their userbase. Yet they were still putting $1m/mo on the corporate cards with 86 full time bay area employees on ~$278k average base, and almost $100k owed to DoorDash. lol

sarkarghya

i dont know why this isn't getting much attention. Isn't this the fate of most ai chat services?

thor-rodrigues

A lot of money moved through different hands, yet it doesn’t seems that nothing of value was created. I wonder how any of this makes sense.

schleck8

> Google spent over $2 billion to hire away much of the company’s talent, including co-founders Noam Shazeer and Daniel De Freitas, in 2024.

gizzlon

I wonder what will happen to all the very personal and sensitive data they (probably) have on users?

andsoitis

”Character.ai’s CEO Karandeep Anand is joining Disney in a newly created role as Senior Executive Vice President and Chief Technology Officer. Karan expects to be joined by members of Character’s technical team to build on Disney’s impressive technology capabilities to help connect fans worldwide with its beloved stories and characters in new and innovative ways.” — https://blog.character.ai/the-next-chapter-of-entertainment-...

karahime

I think it's unfortunate that this is the case and that the service has been treated unfairly in many regards, but c.ai has faced specific problems that other businesses in the space don't, and the basic service isn't going to be marketed towards the more revenue-generating segments like enterprise without making something different out of it.

paaloeye

Boom and bust cycle in startups is so short lately!

xg15

And nothing of value was lost... (well, except investment money I guess)

rvz

You realize that the investors already got their exit after Google bought off the founders and some of their staff? They knew it was going to $0, so the now the employees at this "employee owned" Character.ai got themselves scammed.

hypfer

5 days ago: Character.AI chatbots encouraged users to cut and starve themselves, Kentucky alleges https://www.reuters.com/legal/litigation/characterai-chatbot...

hisfraudulency

It was always odd to me that talent like Noam Shazeer was working at a company with such a gimmicky premise to begin with.

etrvic

Related: https://news.ycombinator.com/item?id=50069942

hirako2000

So many job openings for a company going under. https://jobs.ashbyhq.com/character/

forgetme2020

The CEO and left a week ago. he must have been among the first to see this coming.

softwaredoug

EDIT - glad to hear that Character.ai employees did not get screwed, at least per a comment below --- I worked at a company in 2000s that was acquired. I had no stock but the owner still gave a generous spot bonus and a years salary bonus retention package to employees. Owners got life changing wealth, employees got a down payment for a home. It’s sad that this doesn’t seem to be the norm. Screwing employees on acquisition seems like a severe breach of social contract.

agnishom

Will this kick off a wave off bankruptcy of companies with morally bankrupt ideas?

seydor

I had no idea there is a Morality Court

fra

For all intents and purposes Character.ai was acquired in August 2024, and this is just the mess leftover from their run around antitrust regulation. The company filing for chapter 11 today is shell that was left after Google "hi-quired" (the opposite of acqui-hired) the founding team. The shareholders got paid ($2.7B from Google), the founding team moved on, and what's left is the corporate structure and whoever Google did not want. It sucks for the people left over (but then again, it also sucks to be part of the team that's laid off in a merger). It's also a terrible practice that I hope the Justice department and the CFTC will put an end to soon.

mentalgear

character.ai - the tobacco company AI equivalent - who's business model it was to lull users in with highly-unstable AI 'friends', which was a bad idea from the start as most normal thinking people would assume, yet predatory VCs funded that shitshow and that far too long, and many scandals and even suicides followed from it that could have been avoided. Companies and their executives must be held personally accountable for knowingly detrimental effects on society and their users - that's the only way regulation for the benefit of users actually works. It's a real disgrace that companies like Google and Disney acquired people from them - it displays those companies' true values and motives: profit at any fckin human prize.