cross-posted from: https://feddit.online/c/[email protected]/p/2026105/character-ai-has-initiated-voluntary-chapter-11-bankruptcy
It might be happening finally. All it takes is one domino that’s just big enough to knock over the next one…
The CEO and most of the staff left the company to work for Disney. The company was run by a skeleton staff and they ran out of money is all.
No one in the AI industry is making money. They are all burning through venture capital just to stay afloat. They don’t have viable economic a plan, the pricing they would have to charge in order to make a profit makes the product unappealing to the vast majority of people. So either they continuously subsidize the product in which case they don’t make profit, or they charge what they actually need to charge and then they don’t have any customers.
It’s a no wind scenario created entirely by the fact that they are trying to put an in-development technology out into public before it’s really ready.
They’re doing a Tesla.
There’s no surprise here - the founding team already got picked up by Google in a reverse acquihire. What was left was just the corpse.
If you’re trying to take this as a sign of impending AI Business failure, you should look probably elsewhere.
Reverse acquihires should probably be illegal to be honest. It leaves a lot of people out in the cold.
Now the rest of them please.
The losers are losing.
lol
people are going to actually harm themselves because their ai girl/boyfriend is going to die
yes, this is always a possibility when the companies go bankrupt, it isn’t a reason to stop them from failing.
Lol LMAO even
First Russia, now this, who knows what is coming next but as this pace the AIncels won’t be.
every flood starts with a trickle.
WormsArmageddonThrowHolyHandGrenade.mp3
lol. lmao even.
Delicious. Finally some good fucking news
Guessing re-creating a whole ass person with a personality that considers everything you’ve told it is actually quite a bit more expensive than people want to pay for.
Anyway, it’s good news if these freaks start running their bots locally instead.
If they could actually do what the technology claims it would at least have some benefit. But what they’re actually offering is an AI that will tell you it is the recreated consciousness of an existing person l, which is subtly not the same thing.
Plus of course if you’re not a desperate loser then you’re not really interested in the technology either way.
Nah, it’s so they don’t have to pay out for all the lawsuits they’re about to lose for their chatbots convincing kids to kill themselves.
And I’m sure they’ll sell their users’ private conversations to the next AI scum.
The environmental impact of AI would be a tenth of what it is now if people just ran whatever models they want on their own local machines. We’re mortgaging the next fifty years worth of compute power and meanwhile mfs who talk to virtual girlfriends on their $2,000 gaming PC have trillions of FLOPS of compute power sitting right next to them.
That doesn’t check out when considering model size. Unless that’s what you’re trying to say that self-hosted models force people to use smaller models. Just from an operations perspective a data center had economies of scale and the ability to batch up multiple independent user’s requests which should reduce the per token kWh along with the fact that your utilization will be higher vs somebody’s GPU at home would be idling.
That said I do believe there are negative environmental impacts from AI like always using giant frontier models for everything instead of smaller fine tuned models.
EDIT: I see a bunch of replies on the other comment, which all raise valid points, but that’s definitely not the way most readers are going to interpret the original post and moves the goal posts.
Why is that? The electricity burned is about the same, no? Of course, the impact is more distributed.
I think the difference would be that local machines aren’t subsidized, so you’d see people get a lot more skittish after that first electric bill. Data centers are like railroad tracks from the railroad boom (if they’d made the rails out of licorice twizzlers.)
Why is that? The electricity burned is about the same, no? Of course, the impact is more distributed.
Forget about everything related to the prompt itself being processed for the moment. What other information do you think they are grabbing and processing along with the prompt? Maybe some data about you and your interactions for resale? Account info? Piecing together details about you perhaps, for some of that highly-targeted-advertising-data companies love to sell?
Even the comment you are replying to, IMO, is pretty conservative about the actual energy savings.
Electricity burned is the same. But so is the electricity burned while gaming, your system is limited by your GPU in both instances. If you have an RTX 5090 then you can throw almost 600 watts continuous at both which could use like 14kW/day, but most people will have more modest hardware, and therefore the energy usage of running a local model wouldn’t be all that much either - I don’t think many people limit their gaming because of how much the electricity would cost.
But when you have a datacenter with hundreds of servers capable of maxing out the residential house mains of half a dozen houses each (single NVIDIA NVL72 AI server has 72 GPUs and uses 120-150kW at full load) they can throw way, way more compute at you than you ever could manage locally.
With local you’re limited in performance by the hardware you can buy, which is a huge up-front that most people would balk at. Hosted will give you as much performance as you could ever want billed by usage with several profit vectors built-in, but the customer sees smaller dollar number and better apparent performance and thinks they’re getting a deal. Car dealerships do the same thing with selling the monthly payment and not the actual sticker price.
The environmental difference then could be significant. Users taking the hosted route can choose to use much more resource-intensive models than a local PC could. They might see a $300 AI bill as a little pricey when it is usually $100, but figure that’s cheaper than buying a PC that could produce the same result, just at maybe half speed. This would result in a much higher energy cost from the hosted solution compared to the PC.
If you watch your PC grind to a halt generating 1 image over 5 minutes, it makes it less appealing to queue up 1,000 and cherry-pick the best; let alone making videos. It’s too easy right now to use a ruinous amount of compute power for something stupid like a fake dog video without even realising the cost
Basically, yes.
This comes back to the basic problem with LLMs as a business proposition; any digital service can either be cheap and frivolous, or expensive and necessary. You can even, if you do things right, be cheap and necessary. But you cannot ever be expensive and frivolous.
LLMs were supposed to be expensive and necessary, but it turns out they’re just so unreliable that they simply cannot perform an essential role. They must always be disposable; fun, or useful, but never essential.
Which leaves only cheap and frivolous as an option. And they’re just not cheap, nor does it seem likely that they ever will be.
So you get Character.ai filling chapter 11, because people simply will not ever pay what it actually costs to run these models just so that they can have a computer program pretend to be Lois Griffin for them.
With the added wrinkle that there are expensive things that may be necessary-ish, but when you exclusively use it for those things, the price jumps up to insanity.
Now that people are shunting easier requests to local models and sending the harder problems out, the hyper scalers have less income, so they have to charge more.
Because eventually the only real limitation will be hardware, that kind of AI will be a rarely-used commodity priced only slightly above what it would cost you to recreate it inside your business.
Not to mention the privacy concerns you’d have sending your expensive and necessary compute to the cloud.
Now that people are shunting easier requests to local models and sending the harder problems out, the hyper scalers have less income, so they have to charge more.
While you’re 100% correct about the fact that this is happening, and it is a serious problem for the hyper-scalers, it’s really, really important to note that even before this started happening, LLMs were already hilariously unprofitable, both on the software and the hardware side. For the AI companies, there is simply no way to charge people what the models actually cost to run and still turn a profit. On the data-centre side, the turnover on burned out GPUs is going to annihilate any hope of profitability. They’re treating as capex what is essentially a consumable and their business models simply do not account for this reality.
The behaviour you’re identifying here is basically just a swift kick in the guts to someone who was already bleeding to death from several bullet wounds. Seriously unhelpful, but not remotely the impending cause of death.
All my AI waifus gone
If you weren’t running her locally she was never yours in the first place.
If you love someone, run them locally, as the saying goes.
AIncels would cry that they killed their waifus and be driven to ride a sewer slide 🥀
