character.ai faces shutdown after failed $2.7b google deal

character.ai, an ai chat platform, has filed for bankruptcy and is seeking a buyer. the company attributes its financial struggles to lawsuits over harm to children, regulatory pressure, and operational problems. in 2024, google invested $2.7 billion in character.ai, partly to bring back co-founder noam shazeer, who co-authored google's transformer paper. however, shazeer left for openai in 2026 due to reported issues with google's compute bureaucracy. if no buyer emerges, character.ai will shut down by early december 2026. currently, the platform and its subscriptions remain operational.