Character.AI files for bankruptcy protection as AI companion sector splinters
Citing Reuters, 36Kr reports that AI companion platform Character.AI filed for bankruptcy protection in a US court on October 12, entering a court-supervised asset sale; it reportedly has about 12 million users but loses $8–9 million a month, with a minimum bid of just $20 million — less than one-seventh of its Series A — and could shut down if no buyer emerges. Chinese products in the same space also retreated this year: miHoYo's BSide: Olivia Lin (林离) ended online service 29 days after launch, while Anuttacon's AnuNeko and NetEase Cloud Music's 妙时 were shut down. Meanwhile new efforts such as Tencent's 鹅次元, Kuaikan Comics' Livo and Shanghai Jiyou's PROJECT KISMET are betting on interactive stories, persistent virtual worlds and in-game companionship rather than plain chat.
If confirmed, the filing would show that a large user base alone cannot cover inference and operational costs, pushing companion products toward content-driven models beyond subscriptions.