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.
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.
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.
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.
Equity holders have a more junior claim than debt holders, but if there are enough dollars in the bankrupt company to make the debt holders whole, the equity holders get whatever is left over (obviously in order of seniority).
Which to me implies that in that case, at least current employees were taken care of, and the court will likely force the former employees to also be taken care of because Delaware law doesn't like it when you discriminate in ways that were not spelled out ahead of time.
There was a Supreme Court case that essentially established that Common stockholders can be practically ignored as part of leadership’s fiduciary duty. It revolved around an ex-employee suing for compensation for Common stock after a merger that paid out the CEO and preferred shareholders, leaving stockholders zero.
This is also partially why your common stock options can be valued significantly less than the price the company value would imply: because it’s not an even share in the business.
Assuming you're talking about the Trados Inc litigation, the situation was:
* Raised 52m
* Acquired for 52m
* 8m paid to exec team to stay in place
* Common stock got zero
The lawsuit determined that the board did have a fiduciary duty to the common stock, but that the common stock had no economic value, so they were not actually being harmed here, aka this is basically the best deal the company could have gotten, but it didn't clear the pref stack.
In the Groq/Character deals, they very obviously cleared the pref stack, so common stock deserves to get a piece of the licensing deal at the rate of the stock they held. It's annoying because its a dividend and doesn't benefit from QSBS, etc, but common stock is getting paid there.
I swear this is what's so risky about AI startups, they've completely changed the risk/reward calculus that we all used to be okay with.
You join a company, are granted ISOs/RSUs/etc, and they matter at some point when a liquidity event happens.
Now the liquidity events are "acquihireasitions", the execs and senior AI/ML eng get buyouts to go to a new company -- everyone else: regular eng, designers, PMs, marketers, recruiting, etc. everyone else is just left with nothing.
I wouldn't join an AI startup unless I was on the ML side, and I'm not: I'm just a "regular ass product engineer" so screw me I guess.
Mike Levine (a financial blogger for Bloomberg) says the industry is calling these sorts of transactions "reverse acqui-hires" to distinguish them from a normal (forward) acquihire where the acquirer buys the whole company even if all it wants is the people. He discusses some of the advantages and legalities here:
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.
Gutted. Poached is a bad word for it which already describes a different thing that is a component of this thing. If you can combine "poach" and acquire in a witty way, go for it.
"Hi-quired," although not sonorous, is at least a new word for a specific thing, instead of a word for a closely related thing that would just confuse anyone who heard it. I might've just gone for "Hire-quired" because it's obvious what it means and it seems a little bit easier to say.
Poaching is when one illegally hunts wildlife. People are not animals, and hiring them is not harming them. It is a terrible term to apply to human beings.
Most people know what poaching means without making that association. It’s a perfectly legitimate term across all forms of employment, in both negative and positive contexts.
Do we also need to retire ‘head hunting’, because it brings to mind cartoonishly outdated notions of savagery?
Within the employment context, is it ever a negative? Only from the perspective of the competitor? But to society as a whole, "poaching" (hiring) employees is clearly a massive win.
There are many thousands of words that mean more than one thing. If you go out of your way to deliberately misapply one meaning to another, in a way that's offensive, that's on you. Nobody's asking or forcing you to do that.
Do you object if someone says, "I adopted a new strategy"? After all, children are adopted, and one could say that using this phrase trivializes a deeply important human relationship.
Do you object if someone says, "She's a fan of my work"? After all, a fan is a machine that blows air. It could be said that referring to a person as a fan reduces them to an appliance whose purpose is to serve someone else.
Do you object if someone says, "I have a date tonight"? After all, a date is a fruit. Someone could say that calling a romantic partner a "date" is to objectify them and reduce them to something consumed for pleasure.
To clarify, what I am objecting to is taking a term for something with a massive negative societal impact, and trying to apply it to something that has a massive societal positive impact, in order to make the positive thing sound like a negative thing. I am all for the evolution of language, especially when it serves society.
If you hire the core of a company that constitutes its competitive advantage and abandon the corporate shell and its looming legal liabilities, you might have just hi-quired a business.
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.
I think the point is that it is an acquihire in purpose (want to team, not the assets) but would be blocked by the government so they did a thing that looks a LOT like an acquisition (paid off the shareholders, took the team) without technically being one specifically in order to avoid regulation. It's an "aquihire" in everything except name and the issue is that it was done in order to get around consumer protection laws. Google got what they wanted. The investors got what they wanted. The people got screwed.
it's people just trying to be smart here. You are either acquired (bought for mostly the product, whoever wants to leave is inconsequential), or acquihired (bought also to absorb the talent pool, so it is contingent on some personnel staying on).
All this other stuff people are trying to make up falls under those two when a company buys another.
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.
I don't think this is necessarily true. This wasn't purely hiring. They also licensed the technology and paid off the shareholders, which is why it's basically an acquisition in everything but name.
The problem is each step individually is important to allow companies to do, and follows as a nigh-irrefusable consequence of the previous. You can't ban companies from "poaching" employees, or you end up as an economic hellhole of indentured servants, like Florida, or New York. You can't ban the licensing of a companies technology, since we want innovators who don't necessarily have the opportunity to directly execute on their new technology to still innovate. And you can't ban paying the company for doing so, since that's the whole point.
Meanwhile, the way that plays out is that Google hires all the talent by fairly paying more than the startup can, then can turn around and say "your company is a dead man walking, you can either sell us your tech, or crash and burn with nothing", and the only fiscally responsible decision is to sell.
The rules aren't that simple. The combination should be considered holistically against antitrust law. It's a judgement call that ultimately comes down to a judge or jury.
Antitrust is also federal and is probably generally supreme over state law. E.g. even if Google fairly acquires talent according to state law, it can still be determined to violate antitrust.
This poaching scenario (where Big Co pays above market to a large number of employees to drive a competitor out of business) is very similar to dumping (selling goods below market etc.), which has been illegal for a long time even though "selling goods" is generally legal.
However, since the government (DoJ, FTC, etc.) is the ideal litigant, you actually need someone who works there to not get fired for long enough to complete investigation and enforcement. In a lot of anti-trust cases, all the direct participants benefit: the employees get paid more, Big Co consolidates power, and Small Co gets paid off. The "losers" are most distant like their customers or uninvolved competitors who aren't in a good position to sue.
Which is why at the top end we are supposed to have complementary laws. Bans on non-compete increase competition at the low end. Antitrust and government regulation/licensing at the high end prevent monopiles and thereby increase competition. The problem today is that we are dropping the ball on the high end, letting the Googles stamp down competition when, in decades past, they would have been broken up.
There are rumors that the employees did not get paid out. Such a deal could be done by, for instance buying the equity from the investors at a current fair market value.
That the new "investor" choses to let their investment die may not matter, it would also be cheaper to selectively buy out investors than buy out all equity in the company.
I don't think banning these type of psuedo-acquisitions runs counter to non-competes. I posted the other day about Augment, which I believe did the same thing.
"if it walks like a duck and talks like a duck, it's probably a duck" should apply to acquisitions. These types of acquisitions leave employees (+ other shareholders) holding the bag. It should be illegal.
> where you actually have to entice your employees not to leave
Yes, by offering them things like equity in the company. This practice throws all that out the window though, in essence unilaterally renegotiating the terms of employment. When the leadership team can be acquired independently of the company then these employees can be left with nothing. Sometimes the corp doing the acquisition will throw a bone to the dregs left, but that does not appear to be legally required. It's exploitative and unjust.
I'm not very familiar with the US legal system, but doesn't Federal Law override any state law if there is conflict? Presumably any antitrust action taken by DOJ would be in accordance with federal law, so the state laws shouldn't matter?
When it comes to California, it's complicated. We have a looooong history of playing fast and loose with federal supremacy, and you can bet the defendants would be fighting tooth and nail to keep any court case in California. Which would be pretty defensible, since it would presumably be a California-based company hiring California-based workers.
In particular for the noncompete ban, I believe that trying to enforce a noncompete-adjacent action like this would open you up to being sued by the employees who would have been hired, and the hiring company, in California court.
> California has created one of the most prosperous countries in the world...
Along with the rest of the top 5 states where almost everyone lives in the USA?
Have you ever even lived for a significant amount of time outside of California? Ever try New York, Texas, or Florida? Nobody is "shackled to their workstation" there either. California leads in unaffordable living and wealth inequality, and it's not even because those on top in California are living any better than even the upper middle class elsewhere.
The economy is much more than tech and most of those businesses are not in California and don't want to be.
Yes, I have lived outside of California. It mostly made me more appreciative of this state, with the notably exceptions of last call and gun laws.
Noncompete "agreements" are evil and run counter to every redeeming quality that a free market economy has. If your state allows them, they are in favor of indentured servitude, plain and simple. In contrast, California stands as a beacon for those who refuse such chains. We don't just ban noncompetes in California, we actively liberate those who move here from their out-of-state noncompetes.
And contrary to what you'll read on here, California is not just tech. We've got a massive agriculture industry (more than 50% of the country's produce), several of the best universities in the world, the entire entertainment industry (to such a degree that we're killing everyone's accents), one of the top financial sectors, and the largest manufacturing industry in the country. Hell, our restaurants are better than anywhere else in the country: I can walk down the street walk past multiple restaurants that would be the best in the entire state in most of the rest of the country, to a point that I take it for granted until I walk into a random restaurant in the heartland somewhere and expect it to be good.
We treat our companies well and our residents better. Hell, we even treat our non-residents better than any other state, given that our taxes subsidize the existence of the parasitic 41.
When the worst thing about your state is a housing shortage due to everyone wanting to be there, that's glowing praise.
> Along with the rest of the top 5 states where almost everyone lives in the USA?
The other 5 states don’t even come close economically. If California were a country it would be the 4th largest economy in the world. Fourth. Largest. Economy.
The next closest state is Texas and it’s down around 9 or 10 at half the GDP…
Yes, California has pretty much all its eggs in one basket. That was my original point. I wouldn't be proud of numbers just for the sake of them, especially when they're not my numbers. Not even Texas is that blinded by their own pride.
At the flick of a wrist, any of those handful of businesses can follow Tesla and pull the rug out from under the state. The mind recoils in horror what will happen when the tide goes out.
was it a run around of anti-trust or character's liabilities? It will be interesting if there are creditor lawsuits / trustee clawbacks in the future around these deals.
by using some inane term like "hi-quired" instead of using a few words to explain what happened, you left everyone confused and spawned a bunch of discussion about what "hi-quired" means.
very smart. very good terminology invented by someone who, i'm sure, has lots of blog followers.
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.
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.
Stopped reading right there, nothing of value was lost.
If you want to talk about AI companies who are the equivalent of Phillip-Morris etc perhaps you ought to look at the ones who are playing lobbiest in DC, hmm?
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.
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”.
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.
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.
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.
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.
I don't know how much culpability LLMs have for causing someone self harm but I definitely think it's worth having a conversation about this. Some cases, like Adam Raine suffering from ChatGPT's unhinged sycophancy, are obvious. ChatGPT really screwed up there.
But some cases aren't so obvious, like the cases you mentioned of cartoons, shows, books, etc. Trying to censor any LLM output that might lead to self harm has dangerous implications for free speech and privacy. It might harm more people than it helps.
CA recently passed SB-1119 (Adam's Law) which I'm quite worried about. It forces all chatbot operators to default users into kid mode via § 21811(b), and they have to do age verification to get their adult status back. That could mean face scans and ID verification.
Then, SB-1119 also places limits on what chatbots can say to kids, and the most disturbing one to me is § 21812 (d)(5)(xiv) which prevents chatbots from "Encouraging or instructing a child user to circumvent parental controls or conceal usage."
That word "circumvent" is so triggering to me, given all the abuses of DMCA § 1201's anti-circumvention provision.
Like, if a child is trying to test something on an Android phone, and the chatbot tells them how to root the phone to help them out, now the child can modify the OS-provided age signal required by CA's Age Assurance Act (Cal. Civ. Code § 1798.501) and fake that they're an adult. That might expose the LLM operator to huge liability and I bet most operators will self-censor or ban minors (as Anthropic did) rather than risk a lawsuit.
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
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.
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.
That seems perfectly reasonable. In theory, someone being released from prison has paid for his crime and reformed his behavior (if not, that's a failing of the criminal justice system). In that case, he doesn't deserve further extrajudicial punishment like being unable to get a job, nor is it some kind of breach of morality to hire him.
> In theory, someone being released from prison has paid for his crime and reformed his behavior
There's no theory that says this.
> he doesn't deserve further extrajudicial punishment
1) You're explaining your own personal belief here and not referring to anything.
2) It is not extrajudicial punishment to not hire a child molester to work with children any more than it is extrajudicial punishment to not hire a bank robber to work at a bank.
Exactly. I'm all for giving people who have been in prison employment, but maybe not in the exact way that they went to prison for in the first place. He could have worked at a bagel shop for all I care.
”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.”
At least Anand has been in the business for like 30 years. I didn't know anything about him but I assumed he was a 25 year old from Stanford that VCs decided to shower money on
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 understand the argument for protecting the children from the harms, but why should we have such arguments around “lonely people”? It’s just adults consuming media tailored to their needs. I can’t see it being worse than “IG/TikTok ruining an adult’s perception of reality”, or “Tinder focusing on return-users metrics”.
Character.ai (business model Uber for AI psychosis) takes near 3 billion bag and files for bankruptcy in a move to getting up with the best practices of the big boys of entertainment, as ex character ai ceo moves to Disney (business model: Uber for tax-deductible cultural vandalism and EULA-enforced manslaughter).
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
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.
If you want an unsustainable joyride, then you too can work for a startup headed for chapter 11 (like 8 out of 10 startups).
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.
A lot of that depends on how you do with the birth lottery. The path from Westchester to Stanford is a little easier than from a homeless shelter (that was MY life).
While I understand and have shared that sentiment, this is a classic "is versus ought" trap. It ought to be the case that sheer technical skills can carry you. It is the case that they can't. This is generally true for just about every job in the human experience.
If nothing else, those human connections can be the difference in outcomes when you inevitably screw up. If you've invested in relationships, when you make a mistake, it's more likely someone will say "bluefirebrand means well, and I can see how their good intentions led to this outcome. Let's figure out how to fix this so it won't happen again to them or anyone else." If no one at work knows you except as the person who sits off to the side and never talks to their coworkers, the response may very well be "bluefirebrand who? Alright, let HR know we need to hire a replacement."
Again, it ought to be the case that none of that matters, and everyone is treated the same regardless of their personal network. But it is the case that this isn't how the world works, and it's not reasonable to wish it otherwise. I mean, are you as likely to help a stranger as a friend even if their needs are identical? Most people would say no.
I'm fairly nerdy (or rather, a reformed nerd?) and I haven't met a single "supposedly socially awkward weirdo" person who doesn't have a spark in their eye or who can't ever say anything funny or who can't make a very astute observation that only they end up being qualified to make. Recognize that you are a universe unto yourself and that SOMEone else will notice that.
It’s neither fine nor un-fine, just not unjust. It just is. In all arrangements involving humans, the outcome’s better if the other participants like you. We’re social animals.
The people making bank are those creating these startups.
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.
If you look at the pattern, it is roughly:
- Top ML/AI researchers from the past 10-15 years
- Top ML/AI engineers from top labs or companies
Those above people were hired by FAANG companies or AI startups.
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.
This is the way tech has always been. Or as Carlin said "It's a big club... And you ain't in it."
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...
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.
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.
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.
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.
I remember the laptop renewal also was 3 years. Which would have been fine if they didn't have that policy to issue Dell Latitude, end of the barrel hardware Dell itself couldn't sell.
One day I figured nobody forces me to work for such company.
Elon is the richest person on earth and he doesn't seem particularly happy. Trump is the most powerful and hate-tweets himself to sleep every night. Zuckerberg seems to be his happiest doing sport and spending time with his family.
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
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.
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 are that department; go figure it out!
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.
Well, one used to get more equity. And maybe the first couple of people through the door still get more equity.
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...
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.
There are bad and good people everywhere. I’ve seen new fewer good people at small companies than large or non-tech ones.
Normally I’m skeptical of this kind of schadenfreude, but if $1m/mo is a real number, that’s $11k per employee. I really hope they were running inference through the cards or something.
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.
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).
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.
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.
I don't know if this is exactly the scenario you are thinking of, but the sections on Covid and Australia show real treatment or insurance decisions being made based on genetics. https://en.wikipedia.org/wiki/Genetic_discrimination
Buddy; governments move over decades and centuries, not minutes and hours. You cannot measure the effect of government action in the immediate like you want to.
The fact that the government is moving to collect these data as well as partner with third-party private industry (e.g., Palantir) to avoid direct data collection that runs counter to current/settled law, you have to begin to piece together the future.
Regardless of your apparent desire to avoid accountability for the US government's actions, potential or actual, these are truths for which the citizenry need to protect themselves against both by their own individual actions as well as the collective actions of their voting behaviors.
I believe what you are talking about there is forensic genealogy. That doesn't track down people who are in the database, but finds people who are distantly related and then, through genealogical information, figures out who the suspect could be.
In other words, the people who put their DNA up help track down dangerous criminals. This doesn't sound like something people would object to. I certainly wouldn't.
And this is not the discrimination we were talking about, unless we have now defined the tracking down of murderers and rapists as "discrimination".
They reserve the right to sequence your DNA in the fine print last time I went to give blood over a year ago.
Presumably it's for medical research but that doesn't mean it similarly gets bought/sold for another purpose, sooner or later and possibly in bankruptcy like 23andme as mentioned by the parent poster who cared enough that I figured I'd warn them about less intuitive similar risks.
I think I have started to see similar language at doctors office paperwork recently but maybe I am misremembering. If you care about not getting sequenced, you have to read the fine print nowdays.
> 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 agree it sucks but isn't that life? Jim makes you a promise, Jim dies, his kids don't have to keep Jim's promise, nor anyone else.
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.
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.
> 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.
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.
EDIT - glad to hear that Character.ai employees did not get screwed, at least per a comment below
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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.
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.
I had the same thing happen. Twice, actually - after the non-competes expired for the first acquisition, of course I accepted a position working for the same guy at the next company. Another successful exit there. These were small time, meat and potatoes type startup companies. Nothing fancy. The one thing I did post about here on HN, which I think was one 1) ahead of its time, 2) lacked investor connections, 3) we went with Oakland instead of SF DID flame out spectacularly. My part was the money from the first acquisition plus about 40% of my savings. Ah well. Gotta try it a few times. (still looking for the next opportunity)
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.
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.
It's sad that you are being downvoted, for what you say it's pretty correct.
A lot of people don't understand the reason why financial markets were created and why they continue to exist.
There's a really good book called "Against the Gods, the remarkable history of Risk" which gives a good account on an aspect of why financial markets exist.
Basically, parts of society want to advance things (technology, arts, medicine, etc) but that same part doesn't have to carry the risk of doing their project. Financial markets are there to transfer the risk to people willing [able] to take on it.
Credit and Risk are two tools that have influenced the progress of civilization so much, its crazy.
Sure, there are people that abuse financial markets, the same way there are abusive people in Tech, Arts, or any other human endeavor. But that should not disqualify the whole system.
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)
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?
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.
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.
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.
I don't see any connection to Character.ai, but it's pretty obvious that Twitter is 90% bots, politically leaning heavily in same direction as Twitter's owner, whose pro-Trump interests are aligned with those of Russia.
Where all all these bots being hosted? I have no idea, but it certainly would not be surprising to find many of them coming from Russia (Yandex). Twitter must at least know the IP addressees of these bot accounts, but does nothing to stop them. Perhaps they are actually run by Musk not Putin, who makes no attempt to hide his attempt to use his position to subvert American democracy.
It's a roleplay app, an AI version of the old RP forums, or RP private chats. Anyone sane and slightly mature understands they're not being encouraged to do anything IRL. The main problem I see here is a lack of parenting.
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.
A valuable company wasn't created in the end, but all kinds of value spewed 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.
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.
True, I meant to say value was ejected from this i.e. there were some peripheral winners. I had a totally wrong definition in my mind of the word "accrete" (I was linking it to accretion discs around black holes).
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.
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.
Maybe I'm the clueless one, at it seems others are quite familiar with their story.
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.
Honestly I’d be glad if this type of product disappeared, it’s just predatory on people primed for ai psychosis
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.
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
Mostly playing devil’s advocate here but if the McDonald’s app glitched and showed a popup claiming to be a licensed psychiatrist I don’t think they would be liable for the consequences for any self harm that happened to me because it’s unreasonable.
Not my best wording for the metaphor but why would a company specialized in creating fictional personas for individual users be liable if their fictional personas pretended they had real advice.
Aka how is this different than telling the doctors and the police that a horse told you that you would be hexed if you didn’t try and rob the store?
I heard about various lawsuits, including one where apparently Pennsylvania alleges that a literal AI character has claimed to be a licensed psychiatrist inside of a chat, after the user asked.
It reads like they didn't go under yet, they just expected to with the way the legal challenges were going. As part of that, Disney seems to hope to be taking a good portion (all?) of the employees in the sale. Without keeping staffing up, the sale might not have been viable. If they didn't have such an exit plan involving the employees still being around then it might have made more sense to freeze hiring and ride it out until the end or whatever option would make sense in that story.
Seems fine so long as they are really transitioning those roles to Disney as part of the Chapter 11. Not sure if they are or aren't for each of those listings - if you are that'd be interesting to hear.
I've been at a company that went through Chapter 11 and still work with (at the new place) a few folks hired during that time.
Never liked CHaracter.AI. They ran a bug bounty program before they were acquired.
I found multiple critical bugs (ability to access other user accounts without even having to guess or know the username) and they patched them, told me they were 'informative' and didn't pay me anything.
The FAQ says the chats continue to be protected under our Privacy Policy. Great. They’re selling all or substantially all of the assets though and for a companion app the chats are the asset. So who’s buying and does the privacy policy go with them?
It was my impression that some of these companies are getting acquired for the data they collected, and $20M seems on the low-end nowadays, especially given the traffic they had.
So, is it that Disney isn't getting the data, is the data poor, or is it just not a data thing at all?
The data is mostly teens and young adults pushing the bots into softcore smut as far as the censor classifier allowed them. Almost a liability rather than an asset.
All the drama in here just because it's a gooning and role play toy.
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.
Yes, the friction has been a lot lower, and that builds different habits. You can reach a lot of stuff with the click of a button, sometimes even accidentally on social media such as X or Reddit. Given that we have video tech now, that's also likely much more alluring than images.
Are there children on X? Adult ads on subreddits for children? If so that's a platform issue.
I honestly believe not much has changed. There have been many many "weird" fetish producers out there to fulfill almost any fantasy. Now people can make it up themself more easily and waste less time and money on actually weird sites. Not to mention less scam risk, less money into porn credit card providers, ... Nothing bad about it, except you make it bad but that's the users choice and always was.
Frankly, I don't think the main concern is children. A lot of adults don't have good impulse control, and we should build systems that disincentivize harmful behavior. I'm more worried about someone doomscrolling fetish subreddits today than having to contact sketchy businesses back in the day, because of the hurdle they had to get over.
I think consuming sex content is akin to most time-wasting we can do on the internet today, and that'd be my main concern.
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.
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.
> These same people are fine with going to the island, but ask a chatbot about sex and they'll hang you in the square
That's the most understandable read of it, they're giant hypocrites. Sam is beholden to the government, and the U.S. posture is to be as involved in the sex life of its citizens as much as it can, feigning prudishness, while politicians cheat on their pregnant wives with prostitutes.
The fact that we are bringing back abstinence programs when the very people against abortion also disapprove of contraception just shows what a sexually stupid country we are.
You're not really helping answer the core question here: Why must subjective "weirdness" be censored? Who cares if it's "weird"? People are allowed to be weird, regardless of your personal feelings about it.
When we normalize corporations deciding in what ways we are allowed to be "weird", we just accept corporations forcing us into conformity with whatever they happen to consider "normal", and so far these companies don't have a great track record of drawing that line.
Do you actually think gooning is such a intense thing that people are going to personify AI more than what they do already everyday with Gemini and ChatGPT?
That is a separate, very niche, issue tho. Character.ai and most similar products aren't made for long term relationships, rather short term fun. Like one time throwaway experiences.
Did you ever try? The internet is full of spam, scam and and whatever else. You can easily waste a lot of time and money to find a play partner just to get disappointed.
Why not just pay $20 to a proper company and make up whatever you want to fap to and proceed with more productive stuff after that?
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.
This service is the ground zero of AI psychosis and children talking to chatbots as if it's their friends/lovers.
I'm surprised Disney wants anything to do with it, then again, they wanted to integrate Sora into their streaming offering. Oh, how the mighty have fallen
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.
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.
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.
> It sucks for the people left over
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.
Don't all shares / options go to zero in Chapter 11, or is that only true in Chapter 7 when the lenders take over?
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.
Equity holders have a more junior claim than debt holders, but if there are enough dollars in the bankrupt company to make the debt holders whole, the equity holders get whatever is left over (obviously in order of seniority).
They were likely paid out at the same time other investors were when Noam et al went to Google.
The fact that the legal entity has no money doesn't mean they didn't get paid.
You can figure out a bit about what likely happened by what is not happening. NVIDIA/Groq are being sued for leaving former employees out of the acquisition: https://www.cnbc.com/2026/10/05/nvidia-groq-deal-stockholder...
Which to me implies that in that case, at least current employees were taken care of, and the court will likely force the former employees to also be taken care of because Delaware law doesn't like it when you discriminate in ways that were not spelled out ahead of time.
There was a Supreme Court case that essentially established that Common stockholders can be practically ignored as part of leadership’s fiduciary duty. It revolved around an ex-employee suing for compensation for Common stock after a merger that paid out the CEO and preferred shareholders, leaving stockholders zero.
This is also partially why your common stock options can be valued significantly less than the price the company value would imply: because it’s not an even share in the business.
This is not true.
Assuming you're talking about the Trados Inc litigation, the situation was:
* Raised 52m
* Acquired for 52m
* 8m paid to exec team to stay in place
* Common stock got zero
The lawsuit determined that the board did have a fiduciary duty to the common stock, but that the common stock had no economic value, so they were not actually being harmed here, aka this is basically the best deal the company could have gotten, but it didn't clear the pref stack.
In the Groq/Character deals, they very obviously cleared the pref stack, so common stock deserves to get a piece of the licensing deal at the rate of the stock they held. It's annoying because its a dividend and doesn't benefit from QSBS, etc, but common stock is getting paid there.
I swear this is what's so risky about AI startups, they've completely changed the risk/reward calculus that we all used to be okay with.
You join a company, are granted ISOs/RSUs/etc, and they matter at some point when a liquidity event happens.
Now the liquidity events are "acquihireasitions", the execs and senior AI/ML eng get buyouts to go to a new company -- everyone else: regular eng, designers, PMs, marketers, recruiting, etc. everyone else is just left with nothing.
I wouldn't join an AI startup unless I was on the ML side, and I'm not: I'm just a "regular ass product engineer" so screw me I guess.
This is just not true.
Everyone who had stock (including common stock) at character.ai was bought out at the $2.6bn price: https://www.theinformation.com/articles/google-hires-charact...
The buyout included guaranteed payouts for people who had unvested stock for 2 years post-acquisition.
These transactions are opaque and confusing, but employees are generally not being fucked over here.
Isn't the opposite of acqui-hired just... not acquired nor hired?
Mike Levine (a financial blogger for Bloomberg) says the industry is calling these sorts of transactions "reverse acqui-hires" to distinguish them from a normal (forward) acquihire where the acquirer buys the whole company even if all it wants is the people. He discusses some of the advantages and legalities here:
https://news.bloomberglaw.com/mergers-and-acquisitions/matt-...
*Matt Levine
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.
So...poached, maybe?
Gutted. Poached is a bad word for it which already describes a different thing that is a component of this thing. If you can combine "poach" and acquire in a witty way, go for it.
"Hi-quired," although not sonorous, is at least a new word for a specific thing, instead of a word for a closely related thing that would just confuse anyone who heard it. I might've just gone for "Hire-quired" because it's obvious what it means and it seems a little bit easier to say.
Poaching is when one illegally hunts wildlife. People are not animals, and hiring them is not harming them. It is a terrible term to apply to human beings.
Most people know what poaching means without making that association. It’s a perfectly legitimate term across all forms of employment, in both negative and positive contexts.
Do we also need to retire ‘head hunting’, because it brings to mind cartoonishly outdated notions of savagery?
Within the employment context, is it ever a negative? Only from the perspective of the competitor? But to society as a whole, "poaching" (hiring) employees is clearly a massive win.
The recruiter person should sometimes dramatically proclaim "Off with your head!" to signify a head hunting success (to the poachee).
Reject modernity, embrace tradition.
Actually, it's a technique used to make eggs, and I understand that the eggs are perfectly fine with this usage of the term.
Do we know for a fact that Google isn't cooking these employees in simmering liquid?
But is silence really consent?
Might be too late to start gatekeeping this term
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poach (verb) poached; poaching; poaches
Intransitive verb
1. To encroach upon, especially for the purpose of taking something.
2. To trespass for the purpose of stealing game; also, to take game or fish illegally.
Transitive verb
1. To trespass on.
2. a. To take (game or fish) by illegal methods.
There are many thousands of words that mean more than one thing. If you go out of your way to deliberately misapply one meaning to another, in a way that's offensive, that's on you. Nobody's asking or forcing you to do that.
Do you object if someone says, "I adopted a new strategy"? After all, children are adopted, and one could say that using this phrase trivializes a deeply important human relationship.
Do you object if someone says, "She's a fan of my work"? After all, a fan is a machine that blows air. It could be said that referring to a person as a fan reduces them to an appliance whose purpose is to serve someone else.
Do you object if someone says, "I have a date tonight"? After all, a date is a fruit. Someone could say that calling a romantic partner a "date" is to objectify them and reduce them to something consumed for pleasure.
To clarify, what I am objecting to is taking a term for something with a massive negative societal impact, and trying to apply it to something that has a massive societal positive impact, in order to make the positive thing sound like a negative thing. I am all for the evolution of language, especially when it serves society.
Words can have more than one meaning.
People are, in fact, animals.
Indeed, they are. I should have said they aren't wild game.
Ah, so they hired them.
If you hire the core of a company that constitutes its competitive advantage and abandon the corporate shell and its looming legal liabilities, you might have just hi-quired a business.
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.
So hi-quired means acquihired? Except its also the opposite of acquihired? This makes no sense to me.
I think the point is that it is an acquihire in purpose (want to team, not the assets) but would be blocked by the government so they did a thing that looks a LOT like an acquisition (paid off the shareholders, took the team) without technically being one specifically in order to avoid regulation. It's an "aquihire" in everything except name and the issue is that it was done in order to get around consumer protection laws. Google got what they wanted. The investors got what they wanted. The people got screwed.
it's people just trying to be smart here. You are either acquired (bought for mostly the product, whoever wants to leave is inconsequential), or acquihired (bought also to absorb the talent pool, so it is contingent on some personnel staying on).
All this other stuff people are trying to make up falls under those two when a company buys another.
And yet no company bought another, in terms of legal entities. So it is just a different thing you are unfamiliar with.
commonly called HALO - Hire And License Out
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.
I don't think this is necessarily true. This wasn't purely hiring. They also licensed the technology and paid off the shareholders, which is why it's basically an acquisition in everything but name.
The problem is each step individually is important to allow companies to do, and follows as a nigh-irrefusable consequence of the previous. You can't ban companies from "poaching" employees, or you end up as an economic hellhole of indentured servants, like Florida, or New York. You can't ban the licensing of a companies technology, since we want innovators who don't necessarily have the opportunity to directly execute on their new technology to still innovate. And you can't ban paying the company for doing so, since that's the whole point.
Meanwhile, the way that plays out is that Google hires all the talent by fairly paying more than the startup can, then can turn around and say "your company is a dead man walking, you can either sell us your tech, or crash and burn with nothing", and the only fiscally responsible decision is to sell.
The rules aren't that simple. The combination should be considered holistically against antitrust law. It's a judgement call that ultimately comes down to a judge or jury.
Antitrust is also federal and is probably generally supreme over state law. E.g. even if Google fairly acquires talent according to state law, it can still be determined to violate antitrust.
This poaching scenario (where Big Co pays above market to a large number of employees to drive a competitor out of business) is very similar to dumping (selling goods below market etc.), which has been illegal for a long time even though "selling goods" is generally legal.
However, since the government (DoJ, FTC, etc.) is the ideal litigant, you actually need someone who works there to not get fired for long enough to complete investigation and enforcement. In a lot of anti-trust cases, all the direct participants benefit: the employees get paid more, Big Co consolidates power, and Small Co gets paid off. The "losers" are most distant like their customers or uninvolved competitors who aren't in a good position to sue.
You can ban a compound action. We have antitrust laws.
Which is why at the top end we are supposed to have complementary laws. Bans on non-compete increase competition at the low end. Antitrust and government regulation/licensing at the high end prevent monopiles and thereby increase competition. The problem today is that we are dropping the ball on the high end, letting the Googles stamp down competition when, in decades past, they would have been broken up.
> and paid off the shareholders
does anyone know if the employees who didnt get poached got their equity paid out?
There are rumors that the employees did not get paid out. Such a deal could be done by, for instance buying the equity from the investors at a current fair market value.
That the new "investor" choses to let their investment die may not matter, it would also be cheaper to selectively buy out investors than buy out all equity in the company.
I don't think banning these type of psuedo-acquisitions runs counter to non-competes. I posted the other day about Augment, which I believe did the same thing.
"if it walks like a duck and talks like a duck, it's probably a duck" should apply to acquisitions. These types of acquisitions leave employees (+ other shareholders) holding the bag. It should be illegal.
> where you actually have to entice your employees not to leave
Yes, by offering them things like equity in the company. This practice throws all that out the window though, in essence unilaterally renegotiating the terms of employment. When the leadership team can be acquired independently of the company then these employees can be left with nothing. Sometimes the corp doing the acquisition will throw a bone to the dregs left, but that does not appear to be legally required. It's exploitative and unjust.
I'm not very familiar with the US legal system, but doesn't Federal Law override any state law if there is conflict? Presumably any antitrust action taken by DOJ would be in accordance with federal law, so the state laws shouldn't matter?
When it comes to California, it's complicated. We have a looooong history of playing fast and loose with federal supremacy, and you can bet the defendants would be fighting tooth and nail to keep any court case in California. Which would be pretty defensible, since it would presumably be a California-based company hiring California-based workers.
In particular for the noncompete ban, I believe that trying to enforce a noncompete-adjacent action like this would open you up to being sued by the employees who would have been hired, and the hiring company, in California court.
> California has created one of the most prosperous countries in the world...
Along with the rest of the top 5 states where almost everyone lives in the USA?
Have you ever even lived for a significant amount of time outside of California? Ever try New York, Texas, or Florida? Nobody is "shackled to their workstation" there either. California leads in unaffordable living and wealth inequality, and it's not even because those on top in California are living any better than even the upper middle class elsewhere.
The economy is much more than tech and most of those businesses are not in California and don't want to be.
Yes, I have lived outside of California. It mostly made me more appreciative of this state, with the notably exceptions of last call and gun laws.
Noncompete "agreements" are evil and run counter to every redeeming quality that a free market economy has. If your state allows them, they are in favor of indentured servitude, plain and simple. In contrast, California stands as a beacon for those who refuse such chains. We don't just ban noncompetes in California, we actively liberate those who move here from their out-of-state noncompetes.
And contrary to what you'll read on here, California is not just tech. We've got a massive agriculture industry (more than 50% of the country's produce), several of the best universities in the world, the entire entertainment industry (to such a degree that we're killing everyone's accents), one of the top financial sectors, and the largest manufacturing industry in the country. Hell, our restaurants are better than anywhere else in the country: I can walk down the street walk past multiple restaurants that would be the best in the entire state in most of the rest of the country, to a point that I take it for granted until I walk into a random restaurant in the heartland somewhere and expect it to be good.
We treat our companies well and our residents better. Hell, we even treat our non-residents better than any other state, given that our taxes subsidize the existence of the parasitic 41.
When the worst thing about your state is a housing shortage due to everyone wanting to be there, that's glowing praise.
> Along with the rest of the top 5 states where almost everyone lives in the USA?
The other 5 states don’t even come close economically. If California were a country it would be the 4th largest economy in the world. Fourth. Largest. Economy.
The next closest state is Texas and it’s down around 9 or 10 at half the GDP…
Yes, California has pretty much all its eggs in one basket. That was my original point. I wouldn't be proud of numbers just for the sake of them, especially when they're not my numbers. Not even Texas is that blinded by their own pride.
At the flick of a wrist, any of those handful of businesses can follow Tesla and pull the rug out from under the state. The mind recoils in horror what will happen when the tide goes out.
was it a run around of anti-trust or character's liabilities? It will be interesting if there are creditor lawsuits / trustee clawbacks in the future around these deals.
> antitrust regulation
This is kinda amusing.
An antitrust case over an AI girlfriend... I didn't even know there was a monopoly on that.
“The best time to break up big tech is before they merge” - paraphrased cory doctorow
American DOJ and CFTC won't do anything about these kinds of situations.
... and despite Google spending $2.7B for the "hi-quire", the superstars of the team left Google within a few months, making it all pointless.
> It's also a terrible practice that I hope the Justice department and the CFTC will put an end to soon.
How is hiring people "terrible practice"?
Going around consumer protection law is the claim for a terrible practice, obviously not "hiring people".
They probably didn't want to take on the legal risk of the entity, more than anything.
by using some inane term like "hi-quired" instead of using a few words to explain what happened, you left everyone confused and spawned a bunch of discussion about what "hi-quired" means.
very smart. very good terminology invented by someone who, i'm sure, has lots of blog followers.
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.
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.
>character.ai - the tobacco company AI equivalent
Stopped reading right there, nothing of value was lost.
If you want to talk about AI companies who are the equivalent of Phillip-Morris etc perhaps you ought to look at the ones who are playing lobbiest in DC, hmm?
If you can't be bothered to read a short paragraph, might I raise that you have an attention-span deficit disorder?
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.
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”.
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.
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.
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.
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.
I don't know how much culpability LLMs have for causing someone self harm but I definitely think it's worth having a conversation about this. Some cases, like Adam Raine suffering from ChatGPT's unhinged sycophancy, are obvious. ChatGPT really screwed up there.
But some cases aren't so obvious, like the cases you mentioned of cartoons, shows, books, etc. Trying to censor any LLM output that might lead to self harm has dangerous implications for free speech and privacy. It might harm more people than it helps.
CA recently passed SB-1119 (Adam's Law) which I'm quite worried about. It forces all chatbot operators to default users into kid mode via § 21811(b), and they have to do age verification to get their adult status back. That could mean face scans and ID verification.
Then, SB-1119 also places limits on what chatbots can say to kids, and the most disturbing one to me is § 21812 (d)(5)(xiv) which prevents chatbots from "Encouraging or instructing a child user to circumvent parental controls or conceal usage."
That word "circumvent" is so triggering to me, given all the abuses of DMCA § 1201's anti-circumvention provision.
Like, if a child is trying to test something on an Android phone, and the chatbot tells them how to root the phone to help them out, now the child can modify the OS-provided age signal required by CA's Age Assurance Act (Cal. Civ. Code § 1798.501) and fake that they're an adult. That might expose the LLM operator to huge liability and I bet most operators will self-censor or ban minors (as Anthropic did) rather than risk a lawsuit.
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
In my opinion Disney is a horrible company, but not for these reasons and sorry, but the connection you are making is kind of sick.
You picked a weird example. Did you know that small children literally suck on naked tits? They must be traumatized for life.
Leading off with "they made me see a boob once" to demonstrate how evil they are is so funny.
> the company that hid an image of topless woman in The Rescuers (1977) movie
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.
https://www.snopes.com/fact-check/the-rescuers-topless/
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.
That seems perfectly reasonable. In theory, someone being released from prison has paid for his crime and reformed his behavior (if not, that's a failing of the criminal justice system). In that case, he doesn't deserve further extrajudicial punishment like being unable to get a job, nor is it some kind of breach of morality to hire him.
> In theory, someone being released from prison has paid for his crime and reformed his behavior
There's no theory that says this.
> he doesn't deserve further extrajudicial punishment
1) You're explaining your own personal belief here and not referring to anything.
2) It is not extrajudicial punishment to not hire a child molester to work with children any more than it is extrajudicial punishment to not hire a bank robber to work at a bank.
Exactly. I'm all for giving people who have been in prison employment, but maybe not in the exact way that they went to prison for in the first place. He could have worked at a bagel shop for all I care.
”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.”
— https://blog.character.ai/the-next-chapter-of-entertainment-...
It would actually be super sad if Disney started using AI to create a significant part of their content - completely soulless
The same Disney that replaced dead actors with CGI? They'll jump at the first chance they get.
Not Disney!! I'm sure they would never do such a thing...
https://thewaltdisneycompany.com/news/disney-openai-sora-agr...
These people are playing on a completely different league
At least Anand has been in the business for like 30 years. I didn't know anything about him but I assumed he was a 25 year old from Stanford that VCs decided to shower money on
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.
Game respects game.
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 understand the argument for protecting the children from the harms, but why should we have such arguments around “lonely people”? It’s just adults consuming media tailored to their needs. I can’t see it being worse than “IG/TikTok ruining an adult’s perception of reality”, or “Tinder focusing on return-users metrics”.
But again, I support the ban for children.
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
Character.ai (business model Uber for AI psychosis) takes near 3 billion bag and files for bankruptcy in a move to getting up with the best practices of the big boys of entertainment, as ex character ai ceo moves to Disney (business model: Uber for tax-deductible cultural vandalism and EULA-enforced manslaughter).
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
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.
If you want an unsustainable joyride, then you too can work for a startup headed for chapter 11 (like 8 out of 10 startups).
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.
A lot of that depends on how you do with the birth lottery. The path from Westchester to Stanford is a little easier than from a homeless shelter (that was MY life).
my best friend grew up in westchester and married a woman who went to Stanford who makes an obscene amount of money, so... I get this
If the best advice to succeed at being an engineer is to do less engineering and do more schmoozing, then something is broken
While I understand and have shared that sentiment, this is a classic "is versus ought" trap. It ought to be the case that sheer technical skills can carry you. It is the case that they can't. This is generally true for just about every job in the human experience.
If nothing else, those human connections can be the difference in outcomes when you inevitably screw up. If you've invested in relationships, when you make a mistake, it's more likely someone will say "bluefirebrand means well, and I can see how their good intentions led to this outcome. Let's figure out how to fix this so it won't happen again to them or anyone else." If no one at work knows you except as the person who sits off to the side and never talks to their coworkers, the response may very well be "bluefirebrand who? Alright, let HR know we need to hire a replacement."
Again, it ought to be the case that none of that matters, and everyone is treated the same regardless of their personal network. But it is the case that this isn't how the world works, and it's not reasonable to wish it otherwise. I mean, are you as likely to help a stranger as a friend even if their needs are identical? Most people would say no.
> It ought to be the case that sheer technical skills can carry you. It is the case that they can't.
I'd adjust this and say that they can carry you, but not as far as if you did both well.
> "bluefirebrand who? Alright, let HR know we need to hire a replacement."
Yes exactly and here you are telling me that's fine and I shouldn't think that's unjust
Or worse, that I deserve it somehow, for being someone socially awkward that struggles to connect with people?
Thanks.
There's a reason I don't like how the world Is and think it Ought to be different. Social weirdos like me matter too :/
I'm fairly nerdy (or rather, a reformed nerd?) and I haven't met a single "supposedly socially awkward weirdo" person who doesn't have a spark in their eye or who can't ever say anything funny or who can't make a very astute observation that only they end up being qualified to make. Recognize that you are a universe unto yourself and that SOMEone else will notice that.
It’s neither fine nor un-fine, just not unjust. It just is. In all arrangements involving humans, the outcome’s better if the other participants like you. We’re social animals.
The people making bank are those creating these startups.
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.
If you look at the pattern, it is roughly:
- Top ML/AI researchers from the past 10-15 years - Top ML/AI engineers from top labs or companies
Those above people were hired by FAANG companies or AI startups.
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...
This is the way tech has always been. Or as Carlin said "It's a big club... And you ain't in it."
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...
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.
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.
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.
I remember the laptop renewal also was 3 years. Which would have been fine if they didn't have that policy to issue Dell Latitude, end of the barrel hardware Dell itself couldn't sell.
One day I figured nobody forces me to work for such company.
Elon is the richest person on earth and he doesn't seem particularly happy. Trump is the most powerful and hate-tweets himself to sleep every night. Zuckerberg seems to be his happiest doing sport and spending time with his family.
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.
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
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.
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 are that department; go figure it out!
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.
Well, one used to get more equity. And maybe the first couple of people through the door still get more equity.
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...
Taking equity over money is a rookie mistake. Always. Take. The money.
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.
There are bad and good people everywhere. I’ve seen new fewer good people at small companies than large or non-tech ones.
$100k in DoorDash is a lifestyle
Normally I’m skeptical of this kind of schadenfreude, but if $1m/mo is a real number, that’s $11k per employee. I really hope they were running inference through the cards or something.
The food industry should demand cash up front from the Silicon Valley grifters.
> 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.
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.
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).
That's a long time ago. They should have been able to make a go of it in these hyped times.
Same thing they did with windsurf
how exactly did character.ai lose $2b in 2 years?
Sounds like this money went to individual employees/shareholders and not the company itself?
They have all the money to shareholders. The company that existed after the aquihire is effectively a different company from the original.
lawsuits maybe?
I wonder what will happen to all the very personal and sensitive data they (probably) have on users?
Probably auctioned off, like what happened to Spirit Airlines: https://news.bloomberglaw.com/bankruptcy-law/google-aims-to-...
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.
> 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.
It would have been nice if my siblings had the same opinion.
Has that discrimination scenario ever happened?
I don't know if this is exactly the scenario you are thinking of, but the sections on Covid and Australia show real treatment or insurance decisions being made based on genetics. https://en.wikipedia.org/wiki/Genetic_discrimination
Yes? https://www.law.georgetown.edu/privacy-technology-center/res...
That's not at all what was being discussed; that's DNA information collected by the government.
Yeah they'll buy 23 and me data too
I was asking for what had happened, not what you imagine could happen.
Buddy; governments move over decades and centuries, not minutes and hours. You cannot measure the effect of government action in the immediate like you want to.
The fact that the government is moving to collect these data as well as partner with third-party private industry (e.g., Palantir) to avoid direct data collection that runs counter to current/settled law, you have to begin to piece together the future.
Regardless of your apparent desire to avoid accountability for the US government's actions, potential or actual, these are truths for which the citizenry need to protect themselves against both by their own individual actions as well as the collective actions of their voting behaviors.
Dude they 100% do and have lmao that's not some hypothetical. People have been tracked down with 23 and me data by the feds.
I believe what you are talking about there is forensic genealogy. That doesn't track down people who are in the database, but finds people who are distantly related and then, through genealogical information, figures out who the suspect could be.
In other words, the people who put their DNA up help track down dangerous criminals. This doesn't sound like something people would object to. I certainly wouldn't.
And this is not the discrimination we were talking about, unless we have now defined the tracking down of murderers and rapists as "discrimination".
Are you under the impression that all current and future shady business transactions are public knowledge?
I hate to say it but fyi, don't give blood nowdays unless you read all the fine print they have an opt out policy you trust...
What are they doing when you give blood?
They reserve the right to sequence your DNA in the fine print last time I went to give blood over a year ago.
Presumably it's for medical research but that doesn't mean it similarly gets bought/sold for another purpose, sooner or later and possibly in bankruptcy like 23andme as mentioned by the parent poster who cared enough that I figured I'd warn them about less intuitive similar risks.
I think I have started to see similar language at doctors office paperwork recently but maybe I am misremembering. If you care about not getting sequenced, you have to read the fine print nowdays.
> 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 agree it sucks but isn't that life? Jim makes you a promise, Jim dies, his kids don't have to keep Jim's promise, nor anyone else.
Mr Disney is long dead but we still can't cross the mouse.
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.
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.
This exact thing happened to me. Went from an extremely nice bill paying experience to a buggy crashing one.
> 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.
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.
It’s a company asset to auction off to the highest bidder now
EDIT - glad to hear that Character.ai employees did not get screwed, at least per a comment below
---
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.
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.
I stand corrected, I'm glad to hear that.
I had the same thing happen. Twice, actually - after the non-competes expired for the first acquisition, of course I accepted a position working for the same guy at the next company. Another successful exit there. These were small time, meat and potatoes type startup companies. Nothing fancy. The one thing I did post about here on HN, which I think was one 1) ahead of its time, 2) lacked investor connections, 3) we went with Oakland instead of SF DID flame out spectacularly. My part was the money from the first acquisition plus about 40% of my savings. Ah well. Gotta try it a few times. (still looking for the next opportunity)
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.
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 :/
>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.
It's sad that you are being downvoted, for what you say it's pretty correct.
A lot of people don't understand the reason why financial markets were created and why they continue to exist.
There's a really good book called "Against the Gods, the remarkable history of Risk" which gives a good account on an aspect of why financial markets exist.
Basically, parts of society want to advance things (technology, arts, medicine, etc) but that same part doesn't have to carry the risk of doing their project. Financial markets are there to transfer the risk to people willing [able] to take on it.
Credit and Risk are two tools that have influenced the progress of civilization so much, its crazy.
Sure, there are people that abuse financial markets, the same way there are abusive people in Tech, Arts, or any other human endeavor. But that should not disqualify the whole system.
Replace the people with LLMs and we're well on our way to immanentizing the "Vile Offspring" of Stross's Accelerando.
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)
If you set fire to a stack of money and some folks warm themselves by it, was that creating value?
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.
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?
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.
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.
webvan and pets.com have entered the chat.
Did pets.com really have 20 million monthly active users? What were they using it for?
As we saw after the hero Zelenskyy took down Yandex data centers, user count seems to be vaporware in many cases.
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.
I don't see any connection to Character.ai, but it's pretty obvious that Twitter is 90% bots, politically leaning heavily in same direction as Twitter's owner, whose pro-Trump interests are aligned with those of Russia.
Where all all these bots being hosted? I have no idea, but it certainly would not be surprising to find many of them coming from Russia (Yandex). Twitter must at least know the IP addressees of these bot accounts, but does nothing to stop them. Perhaps they are actually run by Musk not Putin, who makes no attempt to hide his attempt to use his position to subvert American democracy.
A drug dealer at the corner also has lots of active monthly users.
Not 20 million he doesn't
It seems like a lot of people enjoyed using the product. Isn't that value?
Not when the product creates psychosis in people and makes them lonelier and sadder than before and encourages them to starve and cut themselves. Where is the value in this? https://www.reuters.com/legal/litigation/characterai-chatbot...
It's a roleplay app, an AI version of the old RP forums, or RP private chats. Anyone sane and slightly mature understands they're not being encouraged to do anything IRL. The main problem I see here is a lack of parenting.
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.
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.
A valuable company wasn't created in the end, but all kinds of value spewed 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.
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.
True, I meant to say value was ejected from this i.e. there were some peripheral winners. I had a totally wrong definition in my mind of the word "accrete" (I was linking it to accretion discs around black holes).
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.
welcome to the world of VC startups
Get with the program, numbers go up = ai valuable. Don't look any closer, details are the AI's problem now.
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.
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].
[0] https://eu.usatoday.com/story/life/health-wellness/2025/10/2...
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.
Honestly I’d be glad if this type of product disappeared, it’s just predatory on people primed for ai psychosis
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.
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
Mostly playing devil’s advocate here but if the McDonald’s app glitched and showed a popup claiming to be a licensed psychiatrist I don’t think they would be liable for the consequences for any self harm that happened to me because it’s unreasonable.
Not my best wording for the metaphor but why would a company specialized in creating fictional personas for individual users be liable if their fictional personas pretended they had real advice.
Aka how is this different than telling the doctors and the police that a horse told you that you would be hexed if you didn’t try and rob the store?
I heard about various lawsuits, including one where apparently Pennsylvania alleges that a literal AI character has claimed to be a licensed psychiatrist inside of a chat, after the user asked.
It sounds ridiculous to me.
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
So many job openings for a company going under.
https://jobs.ashbyhq.com/character/
It reads like they didn't go under yet, they just expected to with the way the legal challenges were going. As part of that, Disney seems to hope to be taking a good portion (all?) of the employees in the sale. Without keeping staffing up, the sale might not have been viable. If they didn't have such an exit plan involving the employees still being around then it might have made more sense to freeze hiring and ride it out until the end or whatever option would make sense in that story.
They aren't under yet.
Keeping jobs up after filing for chapter 11 seems irresponsible though.
Seems fine so long as they are really transitioning those roles to Disney as part of the Chapter 11. Not sure if they are or aren't for each of those listings - if you are that'd be interesting to hear.
I've been at a company that went through Chapter 11 and still work with (at the new place) a few folks hired during that time.
Removing their fake job postings is low on the priority list. Same with the other companies and their fake job postings...
Never liked CHaracter.AI. They ran a bug bounty program before they were acquired.
I found multiple critical bugs (ability to access other user accounts without even having to guess or know the username) and they patched them, told me they were 'informative' and didn't pay me anything.
The FAQ says the chats continue to be protected under our Privacy Policy. Great. They’re selling all or substantially all of the assets though and for a companion app the chats are the asset. So who’s buying and does the privacy policy go with them?
They're still hiring https://jobs.ashbyhq.com/character/ which makes absolutely no sense and I can only conclude these are zombie jobs
50067507 Character.ai files for bankruptcy, agrees to sell some assets for $20M https://www.reuters.com/legal/litigation/characterai-files-b...
50069942 Character.ai Files for Bankruptcy https://www.theverge.com/ai-artificial-intelligence/1009802/...
50071087 Disney Bids on Character.ai Assets as Chatbot Files for Chapter 11 Bankruptcy https://variety.com/2026/biz/news/disney-bids-on-character-a...
It was my impression that some of these companies are getting acquired for the data they collected, and $20M seems on the low-end nowadays, especially given the traffic they had.
So, is it that Disney isn't getting the data, is the data poor, or is it just not a data thing at all?
The data is mostly teens and young adults pushing the bots into softcore smut as far as the censor classifier allowed them. Almost a liability rather than an asset.
That's been my thoughts as well, but I'm sure at least some of it can be repurposed.
All the drama in here just because it's a gooning and role play toy.
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.
Nothing wrong with some AI gooning IMO
I don't necessarily support banning it, but I don't think it's been all positives from how easy to access adult content has become over the years.
Was it ever hard? Even pre internet some friend of a friend would supply magazines.
Yes, the friction has been a lot lower, and that builds different habits. You can reach a lot of stuff with the click of a button, sometimes even accidentally on social media such as X or Reddit. Given that we have video tech now, that's also likely much more alluring than images.
Are there children on X? Adult ads on subreddits for children? If so that's a platform issue.
I honestly believe not much has changed. There have been many many "weird" fetish producers out there to fulfill almost any fantasy. Now people can make it up themself more easily and waste less time and money on actually weird sites. Not to mention less scam risk, less money into porn credit card providers, ... Nothing bad about it, except you make it bad but that's the users choice and always was.
Frankly, I don't think the main concern is children. A lot of adults don't have good impulse control, and we should build systems that disincentivize harmful behavior. I'm more worried about someone doomscrolling fetish subreddits today than having to contact sketchy businesses back in the day, because of the hurdle they had to get over.
I think consuming sex content is akin to most time-wasting we can do on the internet today, and that'd be my main concern.
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.
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.
> These same people are fine with going to the island, but ask a chatbot about sex and they'll hang you in the square
That's the most understandable read of it, they're giant hypocrites. Sam is beholden to the government, and the U.S. posture is to be as involved in the sex life of its citizens as much as it can, feigning prudishness, while politicians cheat on their pregnant wives with prostitutes.
The fact that we are bringing back abstinence programs when the very people against abortion also disapprove of contraception just shows what a sexually stupid country we are.
"It's like living under shariah law". You're having sex with a robot bro. People are going to find you weird.
You're not really helping answer the core question here: Why must subjective "weirdness" be censored? Who cares if it's "weird"? People are allowed to be weird, regardless of your personal feelings about it.
When we normalize corporations deciding in what ways we are allowed to be "weird", we just accept corporations forcing us into conformity with whatever they happen to consider "normal", and so far these companies don't have a great track record of drawing that line.
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
Do you actually think gooning is such a intense thing that people are going to personify AI more than what they do already everyday with Gemini and ChatGPT?
After all those people with chatgpt boyfriends, I think maybe yeah? any long term roleplay chat is going to tend towards that.
That is a separate, very niche, issue tho. Character.ai and most similar products aren't made for long term relationships, rather short term fun. Like one time throwaway experiences.
As if it's hard to find people, especially perverts, to roleplay with online if that's what you really want to do...
Did you ever try? The internet is full of spam, scam and and whatever else. You can easily waste a lot of time and money to find a play partner just to get disappointed.
Why not just pay $20 to a proper company and make up whatever you want to fap to and proceed with more productive stuff after that?
Seems like the perfect tool for people with bad social anxiety and insecurity, and least that's my guess.
5 days ago:
Character.AI chatbots encouraged users to cut and starve themselves, Kentucky alleges
https://www.reuters.com/legal/litigation/characterai-chatbot...
Agreed, IMHO this might be the real reason.
i dont know why this isn't getting much attention. Isn't this the fate of most ai chat services?
Outside of being acquired, this is the exit
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].
[1] https://character.ai/careers
Either didnt remove yet or ghost jobs like many others nowadays.
The extraction of value will be studied at business schools
If this means their awful "service", which has caused so much harm, ends up closing down, the world will be a little bit better
There are probably dozens of clones because it's just an LLM wrapper at the end of the day.
It was always odd to me that talent like Noam Shazeer was working at a company with such a gimmicky premise to begin with.
Well, he founded it!
Huh. Idk if that makes it more or less strange. Post GPT-3 and he thought the future of AI was an artificial version of Cameo.
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.
The CEO and left a week ago. he must have been among the first to see this coming.
Related: https://news.ycombinator.com/item?id=50069942
And nothing of value was lost...
(well, except investment money I guess)
They have no investors, afaik
Will this kick off a wave off bankruptcy of companies with morally bankrupt ideas?
Boom and bust cycle in startups is so short lately!
I had no idea there is a Morality Court
> What happens to user data and chats?
> Your information continues to be protected under our Privacy Policy, and our data privacy and security practices are unchanged.
Opens Privacy Policy
> 2. How We Use the Information We Collect
> …wall of text covering every use under the sun…
> 3. When We Disclose the Information We Collect
> …wall of text covering effectively anyone and any time…
Translation: yeah you agreed that your data can be sold, and it will be sold.
This service is the ground zero of AI psychosis and children talking to chatbots as if it's their friends/lovers.
I'm surprised Disney wants anything to do with it, then again, they wanted to integrate Sora into their streaming offering. Oh, how the mighty have fallen
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"!
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.
And so it begins.