Character.ai's Bankruptcy Documents Show the Economics of AI Don't Work

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Character. ai is one of the best-known AI chatbot companies that has become popular in the AI companion space. An affidavit filed in bankruptcy court by Character. ai CEO Colin Adams noted simply: “Character’s impressive technology is expensive to operate,” and “at all times, Character has struggled with profitability and its operational expenditure has been high. ” The company said that in 2024, the company spent $13. 8 million per month on AI compute; in 2025, it spent $10 million per month on AI compute. The company’s subscription revenue peaked at $2.

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