In this episode, I feature my exclusive interview with Karan Anand, CEO of Character.AI — the controversial “AI companion chatbot” company that has been at the center of the AI storm (including tragic stories of teens who commit suicide after having established deep relationships with their chatbots).

Likely surprising to many of you (it was to me), Character.AI is now pivoting to be first and foremost an AI entertainment company — courting major studios and creators alike to build and monetize fandom. This is Anand’s elevator pitch: “Think if Roblox, TikTok, and Wattpad had a baby ... this is what Character.AI is rapidly evolving into.”

But can Character.AI successfully make this pivot? And how credible and powerful is its new pitch, including on the critical issues of teen safety? Can the company gain the trust of major studios, IP owners and celebs/influencers from whom they'd like to license content for fandom?

I ask Anand the hard questions. And to his credit, he doesn’t shy away from any of them.

It’s an important, fascinating, and candid conversation — and Peter and Karan covered a lot of ground in 60 minutes, every minute of which is newsworthy.

NOTE: After our interview, Character.AI asked me to include its official response to the new litigation filed by the state of Pennsylvania. Here it is.

“We do not comment on pending litigation. Our highest priority is the safety and well-being of our users.

The user-created Characters on our site are fictional and intended for entertainment and roleplaying. We have taken robust steps to make that clear, including prominent disclaimers in every chat to remind users that a Character is not a real person and that everything a Character says should be treated as fiction. Also, we add robust disclaimers making it clear that users should not rely on Characters for any type of professional advice.

Character.ai prioritizes responsible product development and has robust internal reviews and red-teaming processes in place to assess relevant features.”

Reach out to host Peter Csathy at peter@creativemedia.biz, and check out Peter's entertainment, media, AI and tech-focused business advisory and legal services firm Creative Media. You can also sign up for his free generative AI-focused newsletter "the brAIn" on Substack (via this link) -- all about how generative AI is transforming the media and entertainment industry.