Before Google’s $2.7 Billion Deal With AI Startup, a Stark Warning on Safety
Late last summer, leaders at Character.AI were worried: The company—which offers artificial intelligence chatbots that simulate conversations with Aristotle, Pikachu and other historic or invented characters—was seeing a sharp slowdown in user growth. In September messages to staff, which The Information viewed, Character’s interim CEO, Dominic Perella, said the slowdown was partly due to the back-to-school season.
Perella’s acknowledgment underscored the fact that a significant portion of Character’s audience is young adults and children, a reality that has posed growing legal problems for the company.
Parents have sued the startup in two separate lawsuits alleging that Character exposed their children to harmful content. One lawsuit accused the startup’s chatbots of contributing to a teenager’s suicide. In December, Texas Attorney General Ken Paxton announced an investigation into Character’s safety and data privacy practices for minors. In some cases, its chatbots have become popular with teenagers for romantic roleplay and simulating other intimate relationships.
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State of the business model | Copyright and intellectual property