Google-Tied AI Startup Once Valued at a Billion Dollars Declares Bankruptcy
Character.AI, the teen-beloved chatbot startup that faced several lawsuits over the deaths of minor users, is bankrupt. The post Google-Tied AI Startup Once Valued at a Billion Dollars Declares Bankruptcy appeared first on Futurism .
Character.AI, an AI startup founded in 2021 by former Google employees Noam Shazeer and Daniel de Freitas, has entered bankruptcy proceedings. The company, which allowed users to interact with AI-generated characters, once boasted a valuation of over $1 billion. However, it faced significant legal and regulatory challenges, including high-profile lawsuits alleging psychological harm to minors who used the platform.
In September 2024, several former employees left Character.AI to join Google, which had provided the startup with a $2.7 billion investment. After a review of its options, Character.AI chose to file for Chapter 11 bankruptcy protection, seeking a court-supervised sale to maximize value for its stakeholders. The company had liabilities estimated between $50 million and $100 million and considered selling assets to Disney for $20 million.
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