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And with that we have our first dead AI startup

Techmeme@techmeme.com

Character.AI files for Chapter 11 bankruptcy in the US, agrees to sell some assets to Disney for $20M, and plans to keep operating as it completes the sale (Rhea Rose Abraham/Reuters) Main Link | Techmeme Permalink

Ed Zitron

@edzitron.com

Character.ai was gutted in 2024 for $2.5 billion so Google could rehire one of the original authors of the Attention Is All You Need paper, but it hung in there for two years under Google’s “licensing” deal. This is the first of many I’m afraid. This is all being kept alive by venture capital.

Sean Milstead

@seanmilstead.com

Sorry, when you say it was gutted, more context please? Asking honestly cause “gutted for $2.5B” sounds like PE bought the company for $2.5B, then sold off a ton of assets before the bankruptcy.

13/10/26, 5:45 am0 reposts1 like

Stressed_Scientist

@wittyretorthere.bsky.social

Google entered into a 2.7B agreement with them to get their old guy + some others under Google again. That gave them an expected value of 2.5B which along with the Google capital let them pay out the early investors at a value rate of 2.5B. Then they had to actually do something and bled money.

Sean Milstead

@seanmilstead.com

How much money was actually poured into the company?

Stressed_Scientist

@wittyretorthere.bsky.social

2.7B and no idea the exact amounts that was lost to paying out the early investors (only saw vague significant portion of it used for payback). The original series a investment was 190M at 1B expected value iirc, so just for that you are talking 475M in payouts for the 2.5B announced value.