Character.ai bankruptcy docs: $14M/month compute burn against ~$1M revenue
kyliebytes · x · 2026-10-14
Bankruptcy filings obtained by 404 Media show Character.ai was spending $14M/month on compute while revenue sat around $1M/month, and is currently losing $9M/month. Once valued at $1B after a $150M a16z-led round, the company admits it "enshittified" the product to cut costs and it didn't work. Massive legal fees — from a user-suicide lawsuit and regulator pressure — contributed, but the filing concedes the business was unsustainable even without them. Disney reportedly offered $20M to license its IP after previously sending a cease-and-desist.
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