News Summary

• Character.AI, a former unicorn startup that allowed users to create virtual companions, announced it was filing for bankruptcy while selling its remaining assets to Disney.
• Character.AI had attracted 12 million active users, but computing costs to handle that user base were exorbitant.
• The more people use the product, the more money it takes to run the system, and in this case at least, setting prices high enough to cover costs craters the customer base.
• As a result, corners are cut, revenue fillers like ads are introduced, the product becomes crappier and more predatory, users quit anyway, and the company goes under.