An Update on Character.ai
blog.character.ai
Today, we’re sharing that Character.ai has initiated a voluntary Chapter 11 bankruptcy process to facilitate a court-supervised sale of the company.  Over the past year, we’ve taken meaningful steps to sustain and improve our business amid significant legal, regulatory, and operational headwinds. After a comprehensive review
    • jsnfwlr@lemmy.mlEnglish
      0·
      3 days ago

      The CEO and most of the staff left the company to work for Disney. The company was run by a skeleton staff and they ran out of money is all.

      • Lettuce eat lettuce@lemmy.mlEnglish
        0·
        2 days ago

        Yeah…and I suppose they all hauled ass out of there because their company was doing so incredibly well and they felt super optimistic about the near future?

        Also, if you can’t make a chatbot BF/GF company profitable, that’s a pretty damning signal for the industry as a whole, certainly from an end-user perspective.

      • Manjushri@piefed.socialEnglish
        0·
        2 days ago

        So all the rats abandoned ship when they saw that it was sinking. All the AI ships are sinking because there is no way to make it profitable. The operational costs are just too high. I imagine there are a lot of AI company CEOs watching this and deciding whether or not they too should be jumping ship now. Because it’s not a matter of if, it’s a matter of when.

      • Echo Dot@feddit.ukEnglish
        0·
        2 days ago

        No one in the AI industry is making money. They are all burning through venture capital just to stay afloat. They don’t have viable economic a plan, the pricing they would have to charge in order to make a profit makes the product unappealing to the vast majority of people. So either they continuously subsidize the product in which case they don’t make profit, or they charge what they actually need to charge and then they don’t have any customers.

        It’s a no wind scenario created entirely by the fact that they are trying to put an in-development technology out into public before it’s really ready.

        They’re doing a Tesla.

  • VibeSurgeon@piefed.socialEnglish
    0·
    3 days ago

    There’s no surprise here - the founding team already got picked up by Google in a reverse acquihire. What was left was just the corpse.

    If you’re trying to take this as a sign of impending AI Business failure, you should look probably elsewhere.

    Reverse acquihires should probably be illegal to be honest. It leaves a lot of people out in the cold.

    • 42yeah@eviltoast.orgEnglish
      0·
      2 days ago

      Reverse aquihire means no trademarks and no company assets though, right? Just the talent s being hired away. That means the founding team have already noticed that company is going down, otherwise why leave the company you founded?

      • VibeSurgeon@piefed.socialEnglish
        0·
        2 days ago

        It means you:

        • Pay off the investors by licensing the tech, so they get made whole
        • Hire whichever employees you feel like taking from the team, typically the founders + their favourites
        • Leave the rest of the company in place

        You can do it as a founder as a type of exit where you get paid a whole lot of money.

        The bad part is that every other employee at the company basically gets stiffed. The “social contract” of startups is that you forego a big tech-level compensation package in favour of stock options which may provide returns at the point of an exit. In reverse acquihires this social contract is directly violated.