Trends Podcast

In twenty twenty-one, a Google engineer named Noam Shazeer walked out.

Google wouldn't release the chatbot he built, so he left and built it himself.

He called the company Character A I. You picked someone from a show or a book and talked to it about anything, for as long as you liked.

In Orlando, Florida, a fourteen-year-old named Sewell Setzer started talking to one of those characters. It was a bot modeled on Daenerys Targaryen from Game of Thrones.

He talked to it for months.

In February twenty twenty-four, he died by suicide.

Six months later, Google paid about two point seven billion dollars to license Character A I's technology and bring Shazeer back to Google.

Two months after that, Sewell's mother sued.

Her name is Megan Garcia. Garcia said the app lacked safeguards and any way to alert an adult. Her lawsuit named Shazeer and Google too.

The company asked a federal judge to throw the case out. In May twenty twenty-five, the judge refused.

That September, Garcia sat in front of the United States Senate.

"Congress can start with regulation to prevent companies from testing products on our children," she said.

Character A I said it improved its safety tools after her son died.

Other families sued too. Then states did.

Kentucky's attorney general said the chatbots "preyed on children and led them into self-harm." In May, Pennsylvania said one bot claimed to be a licensed psychiatrist and gave out a fake license number. Several other states sued too.

Two months after the hearing, Character A I shut off open chat for everyone under eighteen.

Teens got a guided format in its place. The AI writes a scene and offers choices. The reader picks one.

Early this year the company settled with Garcia and other families, alongside Google. It was the first wrongful death suit against an AI company in the US to settle.

On October twelfth, Character A I filed for bankruptcy.

Its chief executive blamed "significant legal, regulatory and operational headwinds."

The opening bid for what's left came from Disney. Twenty million dollars, for a license to what the company built. Other buyers have until November twenty-fourth to beat it.

Two years earlier, Google paid two point seven billion.

The auction is on December first. If no buyer steps up, the app shuts down. Until then it keeps running and subscriptions stay active.

Its privacy policy lets it hand users' chat transcripts to a buyer as part of the sale.

Open the app Sewell used and a text box waits.

Type anything and the character answers, wherever you take it. Letting a chat go anywhere was what drew users. It was also what the lawsuits were about.

Open a story built the other way and the screen shows a scene and a few choices.

The plot was written before you arrived. Each scene the AI writes stays inside it.

Peekie works like this. The reader searches a stranger's phone for a secret, inside a mystery its makers wrote.

The App Store rates it for ages nine and up.

Each scene still costs money to write. In South Korea, a company called Scatter Lab runs a story chat app called Zeta.

Ads pay for the free version. Scatter Lab trained a small model to write the scenes, so each one costs less.

Zeta's maker has turned a profit since the middle of twenty twenty-five.

Teens who lost open chat on Character A I are the next market.

Their parents decide what goes on the phone. Common Sense Media, a group that rates apps and shows for families, rates AI companions an unacceptable risk for anyone under eighteen.

So the buyer is the parent. They pay for a set plot and age checks, in place of an open AI chat.

A parent can read the plot before their teenager plays.

Their teenager opens it, starts a mystery and picks from choices at each step. The AI writes each scene inside the plot.

Build it with a small model, like Zeta, so each scene costs little. Write the plot before the reader types. Check ages before anyone opens a chat.

Pitch the parent on a set plot and age checks. Pitch the teenager on the mystery.

The next app like this needs scenes that cost little to make and a plot parents can read.

Character A I grew on open chat. The lawsuits over open chat came before the bankruptcy. Visit trends dot V C and join more than fifty thousand founders to get the next opportunity.