117 pointsby yanis_t3 hours ago25 comments
  • softwaredoug28 minutes ago
    I worked at a company in 2000s that was acquired. I had no stock but the owner still gave a generous spot bonus and a years salary bonus retention package to employees. Owners got life changing wealth, employees got a down payment for a home.

    It’s sad that this doesn’t seem to be the norm. Screwing employees on acquisition seems like a severe breach of social contract.

    • jonny_eh8 minutes ago
      What are you talking about? I was an employee in 2024 and I was not “screwed”. My options were converted into cash at the same valuation that Google paid (vesting schedule remained intact though). Noam did right by his employees.
  • schleck82 hours ago
    > Google spent over $2 billion to hire away much of the company’s talent, including co-founders Noam Shazeer and Daniel De Freitas, in 2024.
    • glimshe2 hours ago
      That shouldn't have been a problem given that AI can fully replace talent. The whole company should in theory only have needed a dream and an Anthropic subscription.
      • Varelion2 hours ago
        WOAH, SOFTWARE ENGINEERING IS DEAD! BUY MORE TOKENS!
        • inSumErgoCogitoan hour ago
          Now i hear that in gandalfs moria voice: "Full of a Toke! Next time throw yourself after it into the wishing well!"
    • dumberquestionsan hour ago
      Well one of those two names was a core contributor to the Attention paper, arguably the top contributor, before leaving Google to make Character Ai, no wonder the re-hired him back (before he left again).
    • lelanthran2 hours ago
      That's a long time ago. They should have been able to make a go of it in these hyped times.
    • nova22033an hour ago
      Same thing they did with windsurf
  • hirako200032 minutes ago
    So many job openings for a company going under.

    https://jobs.ashbyhq.com/character/

  • gizzlon2 hours ago
    I wonder what will happen to all the very personal and sensitive data they (probably) have on users?
    • Medea2 hours ago
      Probably auctioned off, like what happened to Spirit Airlines: https://news.bloomberglaw.com/bankruptcy-law/google-aims-to-...
      • renegade-otteran hour ago
        It's unbelievable to me that this is legal. You put your trust into a corporate entity with your data. The entity goes away, so does the guarantee? Oh, OK.

        I learned that the hard way with 23&Me.

        • satvikpendeman hour ago
          > I learned that the hard way with 23&Me.

          That's why I've never done a DNA test, it's not worth your literal biological data being sold off to god knows where to discriminate against you. I thought everyone realized this but didn't realize it was a niche opinion.

          • c-linkagean hour ago
            It would have been nice if my siblings had the same opinion.
          • pfdietz43 minutes ago
            Has that discrimination scenario ever happened?
        • 44 minutes ago
          undefined
        • naravara22 minutes ago
          My original mortgage lender has a very functioning web portal to set up autopay and check my account.

          They sold my mortgage to a big bank whose web portal and app are pure garbage. Constantly crashing, the autopay frequently just doesn’t autopay, and getting a statement history requires delving through a bunch of random menus.

          It’s really obnoxious that I just get no say unless I refinance.

          • delichon4 minutes ago
            Imagine buying a bond that you are not allowed to sell, and just have to wait for maturity. You'd pay less than for a normal bond, right? Same goes for a mortgage lender. They would risk less and you'd be paying a lot more for such a loan, if you can find one.
      • gazook8939 minutes ago
        > Google’s purchase doesn’t include personal data and privileged materials like Spirit’s 97.5 million passenger profiles or an estimated 50.2 million records related to the Free Spirit loyalty program data, according to court records.
      • GJim28 minutes ago
        It's the FUD spread by the AdTech industry (including here on HN by people who's salaries are dependent on invading our privacy) that is holding back sensible data protection laws in the USA.
    • cmiles8an hour ago
      It’s a company asset to auction off to the highest bidder now
  • thor-rodrigues3 hours ago
    A lot of money moved through different hands, yet it doesn’t seems that nothing of value was created.

    I wonder how any of this makes sense.

    • scrollop2 hours ago
      Have you peeked at how the (very complicated) financial markets work?

      Lot's of people staring at computers moving money and ious around complicated networks within complicated rules making money making money making money.

      Really progressing humanity forward :/

      • nater500039 minutes ago
        >Really progressing humanity forward :/

        You're using amazing technology funded through those financial processes to complain that those financial processes aren't progressing humanity forward lol. Modern AI is the perfect example of how financial systems are important for technological progression.

        Thinking complex financial systems aren't contributing to humanity's progress because you don't recognize how it is used to fundamentally support the work that progresses humanity is like thinking taxes are a scam because you don't recognize how much you actually benefit from taxes everyday.

      • Sharlinan hour ago
        Replace the people with LLMs and we're well on our way to immanentizing the "Vile Offspring" of Stross's Accelerando.
    • post-itan hour ago
      It seems like a lot of people enjoyed using the product. Isn't that value?
    • schleck82 hours ago
      This seems reductive. Character.ai has > 20 million monthly active users, and a lot of company valuation happens on the basis of user count (which is legitimate, that's not vaporware)
      • thor-rodrigues2 hours ago
        I have the impression that if MAU by itself was sufficient, the company wouldn’t have had to file for bankruptcy.

        Obviously the company failed to convert its MAU into paying users, despite the fact the token costs greatly declined over the last years.

        • embedding-shapean hour ago
          Why don't they just not count token costs at all (or any other cost-per-user) and only look at profits, like what Anthropic is doing to figure out if they're profitable?
      • PxldLtd2 hours ago
        I disagree that it's reductive. If each user costs more in API tokens then your company isn't valuable. That's what everyone's been screaming from the rooftops about there being a bubble. We certainly use tons of AI at the company I work for, if we were paying full API prices then I would bet we'd be barely using it.
        • phillipcarteran hour ago
          There's always enterprise wheeling and dealing to keep something discounted, but enterprises are absolutely paying API prices for tokens. For AI coding a least, the issue is more about attributing tokens to a real backlog (no leeching tokens for side projects) and keeping things from running away, both of which all the major AI coding platforms offer solutions for.
      • cicko21 minutes ago
        A drug dealer at the corner also has lots of active monthly users.
      • skeeter202025 minutes ago
        webvan and pets.com have entered the chat.
      • irl_zebra2 hours ago
        As we saw after the hero Zelenskyy took down Yandex data centers, user count seems to be vaporware in many cases.
        • gaiagraphiaan hour ago
          I'm seeing this repeated a lot, but I'm rarely seeing the evidence to back it up. Presumably you're not speaking about Yandex's search engine crawlers here, right?

          In an internet full of metrics and graphs, it's odd that nobody's bringing anything to the table and is just repeating the meme. A bit bottish in itself, tbh.

          If it turned out "usercount was vapourware" due to 3 Russian data centres getting btfo, I think there'd have been a global financial crisis underway as we speak.

    • Ekarosan hour ago
      But lot of numbers went up. And that mean lot of other numbers went up. Which means "wealth" for many went up. And they got bonuses paid.
    • jansport1232 hours ago
      the rich in society (corps, individuals) are so absurdly rich that they can keep throwing money till something sticks with almost 0 risk. If you believe AI is something civilizationally transformational which it is resonable to believe, then why not throw some money at it.
    • roncesvallesan hour ago
      A valuable company wasn't created in the end, but all kinds of value accreted out of this endeavor. The co-founders almost certainly walked away filthy rich. A few hundred people got 6-figure paychecks. A few early investors probably made a profit selling to greater fools.

      It is rumored that their last round valued them at $6B.

      • skeeter202022 minutes ago
        accrete means grow or make larger/greater; this is the opposite were a bunch of value moved around, some was lost (from an efficiency / opportunity cost perspective) and a bunch was concentrated into the hands of a few. That's not value growth.
    • SpicyLemonZestan hour ago
      The US just has a lot of venture capital money running around. It's common for biotech companies to raise about as much as Character.ai (although typically at lower valuations) and then never end up launching a successful product. From a societal perspective, it's valuable to be able to search the space of long shots; from a funder's perspective, the rewards of a good investment are high enough to pay for a lot of bad ones.
    • turing_complete2 hours ago
      welcome to the world of VC startups
    • PxldLtd2 hours ago
      Get with the program, numbers go up = ai valuable. Don't look any closer, details are the AI's problem now.
  • forgetme202029 minutes ago
    The CEO and left a week ago. he must have been among the first to see this coming.
  • hypferan hour ago
    5 days ago:

    Character.AI chatbots encouraged users to cut and starve themselves, Kentucky alleges

    https://www.reuters.com/legal/litigation/characterai-chatbot...

    • donbox34 minutes ago
      Agreed, IMHO this might be the real reason.
  • karahime2 hours ago
    I think it's unfortunate that this is the case and that the service has been treated unfairly in many regards, but c.ai has faced specific problems that other businesses in the space don't, and the basic service isn't going to be marketed towards the more revenue-generating segments like enterprise without making something different out of it.
    • Schlagbohreran hour ago
      What were those specific problems they faced? I haven't paid any attention the market for cloud-based AI services by all these non-frontier companies, but I know it's a big market
      • user43928a minute ago
        I heard about various lawsuits, including one where apparently Pennsylvania alleges that a literal AI character has claimed to be a licensed psychologist inside of a chat, after the user asked.

        It sounds ridiculous to me.

      • mingus8834 minutes ago
        I have never used it but the reputation it has in my bubble is that kids just used it to goon to Disney characters

        So the problem is your customers don’t pay for anything and your content is unlicensed

  • an hour ago
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  • agnishom27 minutes ago
    Will this kick off a wave off bankruptcy of companies with morally bankrupt ideas?
  • hisfraudulencyan hour ago
    It was always odd to me that talent like Noam Shazeer was working at a company with such a gimmicky premise to begin with.
    • donbox35 minutes ago
      Well, he founded it!
    • miltonlost33 minutes ago
      Sometimes talent decides to just make money and scam people into thinking talking with AI versions of celebrities as something worthwhile and positive for the world.
  • seydor25 minutes ago
    I had no idea there is a Morality Court
  • xg15an hour ago
    And nothing of value was lost...

    (well, except investment money I guess)

  • an hour ago
    undefined
  • paaloeye2 hours ago
    Boom and bust cycle in startups is so short lately!
  • an hour ago
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  • mschuster912 hours ago
    And so, it begins. The first domino has fallen.

    I'm gonna go, grab some popcorn and cry a few tears... tears of joy.

    • dumberquestionsan hour ago
      I had a conversation with someone some time in 2024 about Character Ai, wondering how something so obviously exploitative could exist, one data point to consider.
    • Krasnol2 hours ago
      I don't know if there is something to be joyful about.

      AI won't go away, it will just end up being a monopoly.

      • ActionHankan hour ago
        I don't think I know of anyone who denies the value of AI. I think 95% of the people who use it know that it is a tool and are angry / dismayed / confused about companies that are parading it around like a drop in replacement for anything.

        Photoshop is a tool, vs code is a tool, git is a tool, excel is a tool. No one expected these to autonomously generate money.

        People will be happy that the 5% who are delusional are going to be forced to reckon with the lies they've told themselves.

        As an aside, I believe there will be a huge surge in crypto hype again once these sorts of get rich quick with AI schemes dry up.

      • FromTheFirstIn2 hours ago
        A monopoly on not making money
  • baggachipzan hour ago
    Is there this implosion's version of fuckedcompany.com?
  • rvzan hour ago
    You realize that the investors already got their exit after Google bought off the founders and some of their staff?

    They knew it was going to $0, so the now the employees at this "employee owned" Character.ai got themselves scammed.

  • Soliddune162 hours ago
    [flagged]
  • jdw642 hours ago
    [dead]
  • jp00012 hours ago
    Good. Let this be a warning to shit companies with shit products and shit business models.
    • ramesh312 hours ago
      >"Let this be a warning to shit companies with shit products and shit business models."

      ...that you can be a shit company with a shit product and a shit business model and still make a shit ton of money and get hired by Google?

      • jp0001an hour ago
        It’s a good idea. The three things I said still stand.
  • 0gs2 hours ago
    calling this a domino is pretty funny. "the first tiddlywink has spontaneously disintegrated"
    • lelanthran2 hours ago
      It only takes a pebble to start a landslide.

      Most pebbles don't start landslides, but almost all landslides started with a pebble.

      Remember that almost all the "value" in AI companies right now is based on perception, not reported profits.

      • mingus8831 minutes ago
        Pets.com became the emblem of the dot com bubble. Obviously there was a fortune to be made in online retail but they didn’t have it

        Will c.ai be the pets.com of this bubble?

      • m4rtink2 hours ago
        So Character.ai is Jay Cooke & Company ? ;-)

        https://en.wikipedia.org/wiki/Panic_of_1873

        • 0gs2 hours ago
          wow tontines are fascinating! fwiw, i just meant that c.ai was a domino before it got hollowed out by an acquipoach
    • freecodeio32 minutes ago
      I mean a famous AI company filing for bankrupcy might get some investors to hold their breath, given how also OpenAI and Anthropic aren't profitable.
    • aardv44rk2 hours ago
      [dead]