$1 Billion to a $20 Million Bid: 4 Legal Lessons from Character.AI's Bankruptcy
Character.AI was once valued at more than $1 billion. In bankruptcy, the opening bid is $20 million, and it doesn't even buy the IP outright. Here's what the sale teaches business owners about chain of title, departing talent, privacy policies, and the commitments buyers have to honor.
The Watermark Isn't for the Regulator
Most legal problems are fixable. Expensive and annoying, but fixable. You can paper an assignment you forgot. You can clean up a cap table. You can renegotiate a bad contract at renewal.
Authorship isn't fixable. You cannot retroactively author something. Either a person made a creative contribution and there's a record of it, or there isn't. No amount of money in year four can buy back a decision nobody documented in year one.
That asymmetry is the argument. Keeping the record costs almost nothing: attribution you're already generating, logs you're already producing, one afternoon testing what your pipeline strips. Not keeping these records costs you the ability to answer the only question that matters, at the exact moment who wrote your code is worth money.