you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 11 Oct 2026
19 points (100.0% liked)
TechTakes
2733 readers
378 users here now
Big brain tech dude got yet another clueless take over at HackerNews etc? Here's the place to vent. Orange site, VC foolishness, all welcome.
This is not debate club. Unless it’s amusing debate.
For actually-good tech, you want our NotAwfulTech community
founded 3 years ago
MODERATORS
More news about the character dot ai bankruptcy: as it turns out, the true economics of the company are disastrous. At their peak, their revenue was around $1M a month while their AI compute expenses alone were $14M a month! Their total expenses in 2025 were around $18.5M a month before counting legal fees. All of this is for a pure text-based low power LLM (none of the "reasoning" business).
Before AI boosters crow about how much cheaper AI is currently, they tried every trick in the book to enshittify: open models, ads, usage limits, etc. This allowed them to cut down their losses to a mere $9M a month.
Surely this is all one big exception, everyone else in the AI bubble is doing just fine!
I haven't really kept up, but it looks like Character's business model was still focused on NSFW content. If so, then this is also a disaster for the industry at large, since NSFW content is one of the few genuine money-printers for chatbot and image-generation services; people really do want thousands of iterations of the same fantasy, slightly changed in order to stay engaging, and Character was highly recommended as a source of affordable slop. (Examples of unaffordability include the rampant free-tier abuse on ChatGPT, Gemini, and Grok; I'm assuming that customers are willing to open their wallets at least a little. In general, the porn industry turns a profit, so I do think that people will pay for porn.)
My prior estimate (previously, on Awful and on Lobsters) was that token generation was subsidized to the tune of an effective 80-90% discount; this looks to be more in the 90-95% range. For contrast, consider chatbot-booster Willison's belief, in reply above, that Chinese labs will magically produce a five-fold improvement in token production; this still would be between two to four times slower than needed to turn a profit for Character.
How you look at "my company pays $14 for every $ from the user" and not like, idk, stop, seek help, change your job, name, and address, is completely beyond me.
I mean, the founders literally did that, Google hired them back at a 2.8 billion dollar premium for some reason.
You assume that the VCs will keep you alive a little longer as a honeypot to gather more plaintext blackmail material and private information and keep preparing to sell out to Facebook
@lagrangeinterpolator :thisisfine: :trashfire: @BlueMonday1984