Character.AI, the GenAI site that convinced some children to kill themselves, has gone bankrupt after parents sued them.
we found hordes of chatbots explicitly dedicated to themes of pedophilia, suicide, self-harm, and eating disorder coaching, as well as a thriving community of users creating chatbots designed to simulate school shootings, romanticize real mass shooters, and even impersonate the real child victims of mass shootings.
As well as harming its users and then getting sued, the economics of it all just didn’t add up.
https://www.404media.co/character-ais-bankruptcy-documents-show-the-economics-of-ai-dont-work/
Insane. Wonder If this is the start.
It’s insane that losing a billion dollars didn’t matter to anyone, it was the lawsuits that did them in.
If losing money mattered, they would all be under already.
Right now investors still hope that somewhat, all these companies will manage to break even and they can recover some of their losses.
A lot of them will be bringing in trillions once the “free-era” of AI usage is over and everyone is hooked and can’t function without it.
Then the monthly rates come in. The AI companies will own everything we touch.
That was the idea, anyway, there is no demand for most full price ai services
People literally will not be able to afford it. Neither will companies.
They will. Because they won’t be able to function without it. They already can’t think for themselves without asking their AI for help.
Trust me. They’ll pay.
Perhaps for a small group of consumers. Not nearly enough for it to be even close to profitable though. I think you are unaware of the hundreds of billions of dollars of debt these companies are in. And those loans are coming due now and the next years. They will need to pay those debts or else they lose all of the compute, which is literally their entire business. Neither Anthropic or OpenAI owns any datacenters, they are all leased on debt.
They will need to suddenly be more profitable than Microsoft and Google, while they are currently much much less profitable than even the poorest household you can imagine.
I think you’re underestimating the addiction kids have for their AI. They outsource their own opinions.
*Its. But I know that autocorrect makes it hard to use because it’s always incorrectly “correcting” it to “it’s”.
Apostrophes are one of my weaknesses, for sure.