AI companion startup Character.ai files for Chapter 11 bankruptcy, citing costs and litigation

Character.ai , the startup behind one of the largest artificial intelligence companion apps , filed for Chapter 11 bankruptcy Monday, according to a company release and court filings. The company said the platform, where users can have one-on-one conversations and roleplay with AI characters, became "costly to develop and grow," in filings to the Delaware District bankruptcy court. "In its 4-year lifespan as an active platform, Character has amassed a large and engaged user base. The burgeoning and evolving field of AI entertainment, however, has proven to be costly to develop and grow," read a portion of the Chapter 11 filings.