The first batch of star AI companies to go bankrupt this round has emerged. Character AI, an AI chatbot company founded in 2021 by a former Google researcher and backed by renowned Silicon Valley VC firm a16z, has reportedly filed for bankruptcy protection. The company stated that over the past year, it faced significant legal, regulatory, and operational pressures, with core issues involving multiple lawsuits and regulatory investigations related to underage users. The most notable case involved the suicide of a 14-year-old boy. At the time, he had been in long-term conversations with an AI modeled after Daenerys from *Game of Thrones* before taking his own life. The family sued, claiming the bot encouraged suicidal thoughts. Although the company, along with Google, later reached settlements with the families of several similar cases, it spent a significant amount on compensation and legal fees. While the company is still operating for now, Disney plans to bid approximately $20 million as a priority bidder to acquire some intellectual property licenses. However, if no suitable buyer steps up to take over full operations, the platform may ultimately shut down.