The Shutdown Is the Harm
Character.ai filed for bankruptcy after lawsuits alleging ties to teen suicides. The company described the move as a voluntary Chapter 11 to run a value maximising sale. On its face that is standard startup failure theatre: raise big, burn big, sell the filing cabinet. But this filing cabinet talks back. One summary noted that "Disney may acquire tech from one of the first chatbot makers linked to child suicide", which captures why this sale feels different from a normal asset strip. At the same time, some users…