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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

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Aug 19, 2025 post: "What will happen if 20 AI companies are each building capacity for 10% marketshare?" This describes a bubble caused by over-investment in a new technology. If demand destruction occurs (e.g. AI produces incorrect or inconsistent output) the bubble burst can be soon and deep.

Yup. Cases involving things like the suicide of a 14 year old and the boys getting sexual with minors led to lots of out of court settlements and the platform restricting chatbots to over 18 only. The suicide case was in Florida in 2024