Today, we’re sharing that Character.ai has initiated a voluntary Chapter 11 bankruptcy process to facilitate a court-supervised sale of the company.
Over the past year, we’ve taken meaningful steps to sustain and improve our business amid significant legal, regulatory, and operational headwinds. After a comprehensive review of our available alternatives, our board determined that this court-supervised sale process provides us with the best opportunity to maximize value for all of our stakeholders.
We hope that the sale process will yield an actionable proposal that will allow continued operations of the Character.ai platform. If such a bid is unavailable, however, the platform will be wound down.
As we navigate this process, maintaining a safe and engaging experience for our community remains a top priority.
- Why did Character.ai file for Chapter 11?
Over the past year, we have taken meaningful steps to sustain and improve our business amid significant legal, regulatory, and operational headwinds.
After a comprehensive review of available options, we determined the best path forward was to begin a Chapter 11 case to pursue a court-supervised sale of all or substantially all of our assets. We believe that this court-supervised process both maximizes the value of our business and provides the best opportunity for continued service to our platform users.
They’ll certainly get bailouts, but the world has changed since the US could just solve problems by throwing dollars at it. We are now living in a world where the dollar is losing its reserve currency status, slowly but surely, and a massive bailout for a completely unproductive industry will only accelerate it.
There’s also the way that the datacenter boom is already destroying the real economy:
The only way to save the economy is to stop building datacenters. If they get bailed out, though, this trend will accelerate into a crisis as the rest of the economy slips into a depression to pay for the unproductive datacenter buildout. Bond yields will surge, no one will be able to afford the interest rates for loans on new construction, the entire US economy would stall out and implode.
Also, there’s an ongoing energy crisis. We’re on the precipice of a food crisis too, with a record breaking El Niño year happening during a time when urea and diesel prices have surged. That will bring instability to the world, suddenly, a lot of vital US inputs in the global economy might start to experience explosions of popular resistance as prices for grain surge. That’s going to happen whether or not datacenters are bailed out, but a bailout would make this even worse by destabilizing the dollar.
Money is real now.