Google · Andreessen Horowitz · Decrypt
Character.AI, the app where millions of people spend hours chatting with AI versions of fictional heroes and made-up partners
Compiled by KHAO Editorial — aggregated from 2 sources. See llms.txt for citation guidance.
◎ Multiple-sources
The company announced Monday that it started a voluntary Chapter 11 process, a type of U.S. bankruptcy that lets a company keep operating while a judge supervises how its debts get paid or how its assets get sold.
Key facts
- Google came calling in August 2024, rehiring both founders and part of the research team in a roughly $2.7 billion deal that also licensed Character
- Besides the legal hurdles, the company was burning too much money without reporting enough revenue, reporting “an operating loss of approximately $8-9 million per month
- Three and a half years ago, Andreessen Horowitz led a $150 million funding round that valued Character
- AI, its founders and Google, alleging that her 14-year-old son, Sewell Setzer III, died by suicide after becoming emotionally attached to a chatbot modeled on Game of Thrones character Daenerys
Summary
AI filed for voluntary Chapter 11 bankruptcy in Delaware on October 12 to sell itself under court supervision, and says the app will be wound down if no buyer keeps it running. Disney is the opening bidder, offering $20 million for a non-exclusive perpetual license to some of the startup's intellectual property, weeks after hiring its CEO as Disney's first CTO. The company pointed users attached to their AI companions toward mental health resources, two weeks after launching two new chat models and a cheaper $4.99 subscription. AI, the app where millions of people spend hours chatting with AI versions of fictional heroes and made-up partners, has filed for bankruptcy.