AI bubble may reveal your deepest secrets
| Source: Mastodon | Original article
The AI bubble could expose personal secrets, even for non‑users, as shared data about friends and family can be harvested.
Character.ai’s sudden collapse has shone a light on a little‑discussed privacy danger lurking in the AI boom: when AI firms go bust, the troves of personal data they hold can be sold to anyone willing to pay.
The chatbot company, once popular for its “AI girlfriend”‑style characters, folded amid what analysts describe as an AI bubble – a market where the cost of building and running large models outstrips revenue for many players. As the business winds down, its assets – including billions of user interactions – are being packaged for sale. That means the intimate details people share with chatbots – confessions about family, revelations about friends, or even sexual fantasies – could end up in the hands of unrelated third parties.
“It’s not just the users themselves who are at risk,” warns privacy researcher Schroeder. “You might disclose how you feel about your mom, or things like ‘My friend so‑and‑so came out to me as gay, how should I respond?’” Even people who avoid AI altogether can be exposed when they discuss others in a conversation with a bot.
The episode underscores a broader concern that the rapid expansion of AI services, many of which operate at a loss, creates a hidden market for personal data. As more startups merge or shutter, regulators may face pressure to tighten rules on data stewardship and bankruptcy proceedings. Observers will be watching for legislative proposals in the EU and Nordic countries, as well as any moves by major AI platforms to lock down user data against resale. The fallout from Character.ai could become a benchmark case for how the industry safeguards—or fails to safeguard –the private lives it digitises.
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