Google · OpenAI · CNBC Technology
AI companion firm Character.ai files for Chapter 11 bankruptcy, citing costs and litigation
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Character.ai, the startup behind one of the largest artificial intelligence companion apps, filed for Chapter 11 bankruptcy protection Monday, according to a company release and court filings.
Key facts
- In 2024, Google signed a non-exclusive licensing agreement for the startup's large language model technology, and rehired its co-founders Noam Shazeer and Daniel De Freitas, both of whom were former
- In its 4-year lifespan as an active platform, Character has amassed a large and engaged user base
- CEO Colin Adams said that a court-supervised sale "provides the Company with the best opportunity to maximize value for all stakeholders
- Character.ai, the startup behind one of the largest artificial intelligence companion apps, filed for Chapter 11 bankruptcy protection Monday, according to a company release and court filings
Summary
The company said the platform, where users can have one-on-one conversations and roleplay with AI characters, became "costly to develop and grow," in filings to the Delaware District bankruptcy court. "In its 4-year lifespan as an active platform, Character has amassed a large and engaged user base. "These high costs, coupled with potential litigation related liabilities and regulatory engagement have contributed to the Debtor's inability to generate sufficient cash flows to support its business in the present form," it said. Character.ai has been embroiled in several lawsuits related to chatbot safety.