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.<p>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.<p>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.
Any such ban would be in direct conflict with California law (where I assume Character.ai, as a company founded by Xooglers living in Palo Alto is based), under the same logic that forbids non-competes. California has created one of the most prosperous countries in the world under a framework where you actually have to entice your employees not to leave, rather than shackling them to their workstations, and I would be extremely opposed to any attempt to change that.
> It sucks for the people left over<p>Not clear that this is true financially. Of course, it sucks to be at a sinking ship, but in most of these the people left behind are compensated as both employees and shareholders.
> compensated as [...] shareholders.<p>Don't all shares / options go to zero in Chapter 11, or is that only true in Chapter 7 when the lenders take over?<p>In any case, I'm not sure Character.ai's assets will be worth much or that the employees will have any sort of liquidation preference.
Isn't the opposite of acqui-hired just... not acquired nor hired?
I think they mean rather than acqui-hire, acquiring in order to hire the team. They hired the team they wanted individually to specifically avoid acquiring this company.
Ah, so they hired them.
So...poached, maybe?
I think the original meaning of hi-quired was hijacked-acquired, in the sense that the company was acquihired, all the critical talent transitioned to a more important G project and that's it.
American DOJ and CFTC won't do anything about these kinds of situations.
>It's also a terrible practice that I hope the Justice department and the CFTC will put an end to soon.<p>Laws aren't real till 2029, at least
> It's also a terrible practice that I hope the Justice department and the CFTC will put an end to soon.<p>How is hiring people "terrible practice"?
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.<p>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.
These are thin wrappers over LLMs (specifically, C.AI’s proprietary models). Claiming they are equivalent to tobacco companies fails to understand and in fact minimizes the reality here. If you truly cared about child suicide and weren't just playing up an emotional role, you’d seek to learn how these situations came about.<p>LLMs are “yes men," and they will on average agree with you with enough arguing. Go chat with one about a fight you had or even make one up and watch as it soothes and supports you. In fact, I put my finished argument into an LLM and opened two different chats and spoke to it in both of our perspectives, and depending on who was prompting it, it claimed the prompter was “right”.<p>Now, with that in mind, consider the situation: a youth already feels depressed; they talk to the chatbot and, after enough talking, the chatbot is agreeing with them because that is the “probable” mix of tokens. This is platform-agnostic, because it is a fundamental aspect of LLMs. So any value judgment you apply to C.AI specifically must be forwarded to every company, because I have seen, heard, and even made custom roleplay cards with every vendor.<p>Suicides are unfortunate, but even if the LLMs had a role to play, there’s like what, one confirmed case for C.AI’s entire user base? Even if we assume that was only the “known” cases and assume that there are actually closer to 3000 out of their +30 million user base, then that’s basically the chance of being struck by lightning and is below the standard rate of suicide per the CDC.<p>There simply is not strong evidence that LLMs are likely to increase suicides, and while they can be a vector for those with underlying issues, so can anything else. People have committed suicide over cartoons, radio shows, books, TikTok trends, and losing game consoles, and certainly not to mention social media.<p>In short, the advent of LLM chatbots is not strongly correlated to an increased suicide risk, and instead it was an unfortunate situation sensationalized for the eyes of the public by the media. If you wish to push your outrage at anyone, do it at the people who profited off of the suicide and not the company that was picked apart in the process.
Disney. You mean the company that hid an image of topless woman in The Rescuers (1977) movie and from which many child stars have gone off the rails in later life, main actor kissing a 11 old in Blank Check (1994), and the 2026 lawsuit by Raquel Lee Bolleau among other scandals that anyone as a parent would hope not to be there
> the company that hid an image of topless woman in The Rescuers (1977) movie<p>Disney is guilty of a lot of crap—everything else that you mentioned and much more—but that specific instance wasn’t their fault and they acted to correct it once they knew.<p><a href="https://www.snopes.com/fact-check/the-rescuers-topless/" rel="nofollow">https://www.snopes.com/fact-check/the-rescuers-topless/</a><p>Again, I’m not here to defend Disney, they definitely are rotten, but we can point that out by listing all the things they definitely did badly and on purpose rather than leaning on dubious situations which weaken the argument.
The very same Disney that hired Brian Peck to work on The Suite Life of Zack & Cody immediately upon his release from prison after serving 16 months for sexually abusing Drake Bell while working on Drake & Josh at Nickelodeon.
<i>”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.”</i><p>— <a href="https://blog.character.ai/the-next-chapter-of-entertainment-and-fandom/" rel="nofollow">https://blog.character.ai/the-next-chapter-of-entertainment-...</a>
These people are playing on a completely different league
The part that’s insane to me is his company ripped off Disney IP then Disney hires him saying how much he loves and respects Disney.
Sets up the most vile company preying on lonely people, runs it into the ground - then gets hired to do the exact same thing for a bigger company. It’s a big club, and you ain’t in it
He didn't really run it into the ground, this whole bankruptcy thing is just smoke and mirrors to cover the fact that Google basically acquired them ages ago
I can't even imagine what George would say today. I know things weren't great in the 80s, but this seems to be a whole new level of stupid.
I'm imagining the horrors of character bots themed and named after popular disney characters at the expense of our youth. Dystopian stuff
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
Sometimes watching the fresh-faced punks make bank while I slave away at a "regular" company for average pay is just demoralizing. It's really about being at the right place, time, and near the right people, isn't it.
> It's really about being at the right place, time, and near the right people, isn't it<p>It's also about having the right moral flexibility. To be in this particular club, you have to hang out with some people that a bunch of us would really rather not be associated with...
They were clearly in it for the investor perks and not the product, spending away like that.<p>If you want an unsustainable joyride, then you too can work for a startup headed for chapter 11 (like 8 out of 10 startups).<p>Also, knowing people in general has never not been valuable. It's arguably the main thing holding most engineers back from success. Plenty of evidence backs this up: Type fewer keys, press more palms.
The people making bank are those creating these startups.<p>Their startups get acquired, or they get acqui-hired because of the founders and core people, who in turn have some pedigree which send strong signals.<p>If you look at the pattern, it is roughly:<p>- Top ML/AI researchers from the past 10-15 years
- Top ML/AI engineers from top labs or companies<p>Those above people were hired by FAANG companies or AI startups.<p>But most important of all, it isn't a overnight success. Many of these have been going at it for 10+ years now. Of course some are relatively young, as in having joined Anthropic or OpenAI more recently (past few years), and launching their own startup after 2022.
Yes, yes, yes...<p>This is the way tech has always been. Or as Carlin said "It's a big club... And you ain't in it."<p>Occasionally, you can ride their coattails (there will always be rising tides), but if you don't have the right connections and the right degrees from the right universities, you're not invited to the box seat TLA titles of these things...<p>The odds are much better than state lotteries, and the payout is higher than the stock market, but most of us still need to do our own financial planning instead of socializing the risks of the founder class as they privatize the gains. And yet, each day I get these ludicrous emails from a16z about which startups started by which all star founders want to hire me for less than I make from passive revenue these days for bread crumbs of equity.<p>But the thing here is, who needs character.ai in an age of local models and cheap tokens from OpenAI and Anthropic (unless you're very naughty and not shaming, just noting)? High margin role play disrupted by cheap open weight models: how very Clayton Christensen.
Joining or starting a startup is a risk, many fail and leave the founders and early joiners with nothing. No risk, no reward.
Nothing except the $278k average base salary, while living luxuriously at work and probably home too on the startup's expense card, as the $100k door dash bill shows. I bet there were a ton of fancy off sites in Hawaii or wherever.<p>Meanwhile at $bigco I just got my request to buy a shitty $1k Dell laptop denied because I got one 2 years ago and I have to wait 1 more.
Its all about hacking companies and VCs - instead of hacking hard problems. Astra- give me the API of my society.. what do you mean Bearer Token..
You also have to be a total scumbag.
Bullshit. I met a lot of my favorite people in the world working in startups, people I want to stay in contact with for life because they’re good and I enjoy being around them.<p>There are bad and good people everywhere. I’ve seen new fewer good people at small companies than large or non-tech ones.
I'd argue that most people would easily pivot to "total scumbag" for 250k+ salary. Me included.
The thing is, if you were already in the crowd that gets offers to work at this sort of startup, you could be drawing the same 250k+ to work a normal 9-5 at a FAANG-adjacent<p>Signing on to a hookers-and-blow startup is a choice a lot of these folks made, not their only route to money
Correction: FAANG salaries are almost always better. You get a lot more equity with startups. It’s a gamble. You’re betting a short term paycut on the company’s success.<p>But the main reason I’d generally work at startups anyway is because it’s more fun. When something needs to be done, you can’t contact the department that does the thing. You <i>are</i> that department; go figure it out!<p>And yes, that’s also a lot more pressure, but I wouldn’t trade it for a 9-5 desk job. (Other people absolutely would, and do. I never criticize their decision making. That’s what’s right for them. It’s just not what’s right for me.)
> You get a lot more equity with startups. It’s a gamble. You’re betting a short term paycut on the company’s success.<p>Well, one used to get more equity. And maybe the first couple of people through the door still get more equity.<p>If you are engineer #5 or later at a startup today, I'm willing to bet the 5-year upside on a FAANG comp package is on par or higher with a decent startup exit...
$100k in DoorDash is a lifestyle
The food industry should demand cash up front from the Silicon Valley grifters.
All the drama in here just because it's a gooning and role play toy.<p>From what I can tell it was a popular tool with many users, one of the more popular ones among MANY. There are thousands of users using tools like this. Nothing inherently bad about that.<p>Nothing wrong with some AI gooning IMO
Yeah I find it really creepy how obsessed people like altman are at preventing users from having any sort of adult conversation. It's like living under shariah law.<p>Why does it matter if people want the chatbot to write sex stories? Who does that harm? It's not immoral or illegal. These same people are fine with going to the island, but ask a chatbot about sex and they'll hang you in the square.
It seems like a bad way to get ai psychosis from personifying a LLM too hard. Keep your roleplay organic and find some friendly partners maybe
Not familiar with the company. Home page says nothing other than a tag line and a signup to continue. About page does add very little. Their blog provides a little bit of insight, but honestly, I have no clue what they sell or what the value prop is.<p>Maybe I'm the clueless one, at it seems others are quite familiar with their story.
Anthropomorphized AI character creation, in one line. Rather icky in my opinion; has led to suicides[0].<p>[0] <a href="https://eu.usatoday.com/story/life/health-wellness/2025/10/20/character-ai-chatbot-relationships-teenagers/86745562007/" rel="nofollow">https://eu.usatoday.com/story/life/health-wellness/2025/10/2...</a>
Same for me, didn‘t know the company and the website says absolutely nothing about what they do. Wikipedia helped me; it‘s an AI chat bot service where you can interact with customizable characters.
Check their Reddit. Their userbase is rabid and has a casual relationship with reality. I checked a few random posts and there were people talking about how their life was over or how character.ai was the only thing that worked for therapy.<p>Honestly I’d be glad if this type of product disappeared, it’s just predatory on people primed for ai psychosis
50067507 Character.ai files for bankruptcy, agrees to sell some assets for $20M <a href="https://www.reuters.com/legal/litigation/characterai-files-bankruptcy-agrees-sell-some-assets-disney-20-million-2026-10-13/" rel="nofollow">https://www.reuters.com/legal/litigation/characterai-files-b...</a><p>50069942 Character.ai Files for Bankruptcy <a href="https://www.theverge.com/ai-artificial-intelligence/1009802/character-ai-files-for-bankruptcy-disney" rel="nofollow">https://www.theverge.com/ai-artificial-intelligence/1009802/...</a><p>50071087 Disney Bids on Character.ai Assets as Chatbot Files for Chapter 11 Bankruptcy <a href="https://variety.com/2026/biz/news/disney-bids-on-character-ai-assets-chapter-11-bankruptcy-1236909984/" rel="nofollow">https://variety.com/2026/biz/news/disney-bids-on-character-a...</a>
The careers page is still up and and sounds like a great place to work - build the future, create with purpose, collaborate with the best [1].<p>[1] <a href="https://character.ai/careers" rel="nofollow">https://character.ai/careers</a>
If this means their awful "service", which has caused so much harm, ends up closing down, the world will be a little bit better
i dont know why this isn't getting much attention. Isn't this the fate of most ai chat services?
Related: <a href="https://news.ycombinator.com/item?id=50069942">https://news.ycombinator.com/item?id=50069942</a>
> What happens to user data and chats?<p>> Your information continues to be protected under our Privacy Policy, and our data privacy and security practices are unchanged.<p><i>Opens Privacy Policy</i><p>> 2. How We Use the Information We Collect<p>> <i>…wall of text covering every use under the sun…</i><p>> 3. When We Disclose the Information We Collect<p>> <i>…wall of text covering effectively anyone and any time…</i><p>Translation: yeah you agreed that your data can be sold, and it will be sold.
Amongst all the professionals that I have worked in my 15 years, VCs are the least ethical people. They will do “anything” for money.
"maximize value" is the new "minimize loss"!
And so it begins.