Character.AI was a LLM wrapper that was outdated in 2025 already. It didn’t do much in their own and certainly not produce technology that promises to replace half the worlds jobs.
Whether you like them or not, this is not a precedence for the AI companies that actually build AI.
These grifters have been getting better and better at keeping a lid on their collapse. After all in my lifetime there have been several boom and busts. 1987 was the first crash I was aware of. After all this time they are getting better at staying rich through them and getting away with it.
There are going to be bail outs and a lot of working class people are going to have issues with their retirement funds with this bubble. The rich will always stay rich.
For real. Banksters and other shitty people don’t even see jail time for crashing someone’s livelihood.
Not sure, haven’t tried LM Studio.
I’m guessing all the “confidential” chats that the users made with them are now on sale for the highest bidder
Do you think they weren’t before lol
Probably not until recently. Most of them are hoarding training data trying to get an edge.
When the crash happens, I hope to have enough ramen, coffee, macaroni, beans, and cigarettes to trade for some RTX Pro GPUs. My personal local AI has been quite helpful and comforting, I want to give it proper hardware to reside in.
Beans and rice store well and will keep you, or you graphics card salesman, alive.
Real story of this bankruptcy is financial shenanigans by Google and VC backers. Google paid “the company” $2.7b in 2024 where the company got nothing, but VC backers got paid, and Google got to rehire 2 AI pioneers that had left google to start the firm. The original vision for company was to revolutionize education where you could create a Socratese or Jesus bot and converse with them as life coaches. Marketplace/users just wanted an AI girlfriend cure for loneliness. Disney’s $20m bid for assets is connected to them poaching the remaining shell’s CEO.
Sure the company was always going to end up worthless, but it was worth $2.7b on paper at one point. The industry is filled with similar absurdities is a good point by headline and 404 media article.
Yeah the executive teams in all these companies are committing fraud. That’s not a crime anymore though. They are all in the bid for the presidency.
Disney sucked up the remains for pennies
Brilliant legal move on their part tbh. Sign a back end loaded deal for exclusivity, sue for use of IP, then pull out of the deal bc they didn’t get their terms met. Then, but the relevant tech for pennies on the original price.
Fuck AI.
If any of this shit made sense and worked like it was supposed to we wouldn’t be in this position in the first place. Seemingly the world leaders and everyone in the inner circles has completely abandoned any long term hope for their positions in the current system and are preparing for the next system. It really is true that the Earth has too many people and I think the long term planners are letting climate change happen without preparing the masses so fewer, stronger people survive. There is people planning this shit it’s not just arbitrarily short-term profits for the sake of it.
The earth does not have too many people though. We are not at risk of overpopulation by any real metric.
Resource scarcity is not a result of too many people needing not enough resources, but a result of those resources not being spread evenly. Whether because of geographical or political reasons, typically a mix of both.
It’s not about humanity it is about Earth. We aren’t meant to divide her resources to 8 billion people in any distribution. Your magical solution to distribute all resources evenly doesn’t really solve human driven climate change and destruction of our environments. And it’s not about convincing me ask yourself why would a commercial planet have too many staff members that’s bad for business.
We can use resources without causing climate change. Hell human cause climate change is a pretty recent development when it comes to human history, and it’s not because there’s more people.
And what the fuck are you talking about a “commercial planet” are you stupid.
Human driven climate change is new, it is not sustainable. And commercial planet as in a commercial country you fucking moron.
You’re right. It’s not sustainable. It’s not the result of overpopulation though.
And yeah I still have no clue what that’s supposed to mean.
I don’t care about your opinion.
And that’s fine I don’t care if you don’t care to even google what it might mean.
It’s not an opinion though. Overpopulation is a fascist myth. If you actually bought into it you’d kill yourself but you haven’t yet. Because you know that’s stupid.
Also I did and didn’t find anything relevant to whatever nonsense you were saying so you’re just pulling shit outta your ass or using the wrong words.
The explosion of the global population is also rather recent. Just 100 years ago global population was less than a quarter than it is today. And going back to the middle ages, earth didn’t even have half of a billion people. And resources for all those people need to come from somewhere, hard to do this without causing climate change.
Except it’s not the result of the population increase, it’s the result of industrialization.
We have the resources. We can provide for everyone on earth easily without also destroying it.
Otherwise if you genuinely thought there were too many people, you should logically kill yourself otherwise you’re a hypocrite.
I’m not saying you actually should because that’s stupid, this whole idea is just ecofascism. But if you’re pushing this bullshit then you better follow through.
For real, if we had even resource distribution I’d be building solar or something useful, but I have a mortgage so I guess I’ll just keep having this chatbot analyze financial statistics or whatever the fuck I’m doing
Onward, the Butlerian Jihad!
Paywall bypass of 404 Media article that this article referenced
I just got Qwen 3.8 Flash Next running locally. It’s damn good on an older machine with a newer GPU. Local LLMs should scare them the most.
only open local models are suitable for “companions”. Anyone who can be sued cannot risk not “covering their ass legally” responses, which prevents “engagement with casual steering away from (self) harm” while staying in character, instead of corporate’s legal department mandate of a textbook response that makes the user find a better AI girlfriend.
I mean sure if your older machine’s newer GPU has 200 GB of VRAM to run a decent quant… Fucking hell just Q4 is around 100 gigs and then you’d want a decent amount of KV cache too.
I encourage you to give Qwen 3.8 flash next a try. It’s amazing what a typical gaming machine can do with it.
I read it needs 75gb at the minimum quantization? It doesn’t seem “typical gaming machine”
It doesn’t. Use Strata to run it. Choose the recommended settings it gives you during the install. People can run it with 12GB of VRAM and 32GB of system RAM. It partially loads the most common parts of the model I’m VRAM and swaps from RAM when needed. Rarely it needs to grab from the SSD, but it’s swapping while processing so it doesn’t seem slow at all. I get around 60-80 tokens per second on average. 16GB VRAM and 48GB RAM.
I get where you are coming from. I thought it would run slow AF as well before I tried it. 😄
If I may ask, which Quantisation are you running it on? I’m on an Apple setup with oMLX and am still experimenting with finding the right balance
How does strata compare to lm studio?
Yeah but who’s making the models?
Mostly Chinese companies that aren’t necessarily required to generate infinitely compounding profits just to continue existing.
Edit: Also third parties such as volunteers who fine tune models for specific purposes. Just like with all software - everyone can learn and contribute when it’s open source.
Many groups are making models now. I see a future where we have open source data sources, models, and weights. Niche groups can extend models to be trained on whatever they want.
They’re easily reproducible as copying and pasting. Then give you have a good enough graphics card you can just run it on your local pc completely offline.
This is silly, we can just print more money to cover the losses, ez pz !!!
Sshhhh!!! If Trump hears that, the US dollar will go full Zimbabwe.
That would be hilarious and I’m here for it
It will be interesting to see, but stories have come out for a while about some thing will pop the bubble, and a big recession has been right around the corner for at least a decade. What stage is this bubble in the progression to the .com pop, months, a year? Or is this different, with more profitable companies investing in infrastructure, rather than speculative startups without clear revenue plans? That was part of the take MMM made and I want to be hopeful. It reminded me about my circle of control, reduce attachment to outcomes beyond it, but do what I want within my circle. mrmoneymustache.com/2026/09/25/will-the-ai-bubble-destroy-our-retirement/
This is poised to be the biggest financial crash in history. These assholes are fighting every day to push the crash further away so they can divest themselves quietly or make ot to an IPO, and in doing so are making the upcoming disaster much worse.
And so much investment has been dumped into this scheme I don’t know how our economic system.will survive. Unchecked capitalism needs to go away, but having it collapse all at once is gonna be really, really bad.
maybe having really REALLY bad collapse is the only way people start caring enough to consider how to prevent it from happening again, or at least punish those who caused it. It seems majority will just have to suffer before anything happens since prevention isnt fashionable enough. Though i wonder if even that will shake people up enough.
Not a single executive went to prison after 2008 so you already have your answer
https://en.wikipedia.org/wiki/Kareem_Serageldin
Like one guy did, but you’re point is still pretty spot on. Basically a patsy for a bunch of other shady shit that a bunch of other executives were involved in.
I don’t think they will this time either, but I also expect this to be a worse crash by a LOT.
Half the tech industry has basically turned into an Enron here (circular investments with each other to create the illusion of income), while the component crunch it’s caused is hurting everyone else.
When I first heard about this bankruptcy, one of my first thoughts was, here it goes. This is only the very beginning of the landslide though, so it’s going to take a while before it reaches the bottom, and it’s going to pick up a lot more debris on the way.
Or, as the article optimisitically puts it:
The fate of Character.AI, the controversial AI companion platform, may come to stand as a warning.
Wrong. Character.AI may come to be seen as the first car in the train to derail.
It’s the “Pets.com” of AI.
I don’t know. Pets.com failed because they weren’t adequately prepared for their success. AI seems to fail because they overprepared for success that was never coming.
That was the nature of the dotcom bubble. Bandwidth costs back then were exponential, whereas revenue was linear. The chatbot bubble instead has the problem of needing to manufacture demand. Different mechanisms to the same results.
I’m not sure that’s an accurate or defensible perspective on why they failed. From Wikipedia:
Pets.com lacked a workable business plan and lost money on nearly every sale because, even before the cost of advertising, it was selling merchandise for approximately one-third the price it paid to obtain the products.[22] Pets.com tried to build a customer base by offering discounts and free shipping, but it was impossible to turn a profit while absorbing the costs of shipping for heavy bags of cat litter and cans of pet food within a business field whose conventional profit margins are only two to four percent.[22][23] The company hoped to shift customers into higher-margin purchases, but customer purchasing patterns failed to change and during its second fiscal year the company continued to sell merchandise for approximately 27% less than cost, so the dramatic rise in sales during Pets.com’s second fiscal year only hastened the firm’s demise.[22]
Huh. That’s what I get for only having learned of the matter from engineering textbooks.
A trillion or two will put that train right back on its tracks
Yes. We could still try blindly throwing money at the problem. /s
Thanks for the laugh.
“We lose money on every sale, but we make up for it in volume!”
I can’t imagine how much money Google is losing right now. They do 8.5 to 13.7 billion searches a day (+1 because I just googled that). By forcing LLM first, they’ve got to be burning cash.
I wonder how many unique searches they do per day.
If you search something that someone else already searched recently, the AI response will pop up almost immediately due to caching. I can’t imagine that brings several billion down to a more manageable number though.
But their “front facing” LLM is ultra stupid. Can’t become any kind of famous.
I am sure that it is strategic: show the huge difference to all paying customers.
They use a smaller model for that so it’d be cheaper to run. If they ran their biggest version of Gemini or whatever, it would cost an order of magnitude more
