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Character.AI files for Chapter 11 bankruptcy

Original: Character.AI filed for Chapter 11 bankruptcy Monday after compute costs ($10M/month in 2025) consistently exceeded reven

Character.AI filed for Chapter 11 bankruptcy on Monday after its computing costs, reported at roughly $10 million per month in 2025, consistently outstripped revenue that peaked at about $5.3 million monthly. Disney has bid $20 million for an IP license, and the platform will shut down unless a buyer emerges by late November.

Why now: The collapse of a prominent AI startup amid unsustainable compute costs is a notable warning for the broader AI industry, with Disney's bid adding acquisition intrigue.

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• Character.AI filed for Chapter 11 bankruptcy Monday after compute costs ($10M/month in 2025) consistently exceeded revenue ($5.3M peak monthly). Disney bid $20M for an IP license. The platform shuts down unless a buyer emerges by late November. https://www.… · schuler · 1

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