Daily Edition · Page 9

THE DAILY INDEX

Technology, AI, software, security, crypto and business

HEADLINES & TRENDS

TLDR Founders

CHARACTER.AI EXPLORES SALE OR NEW FUNDING AMID RISING COSTS

Character.AI has been holding discussions with potential buyers, banks, and staff over the past few weeks about raising a few hundred million dollars at a valuation of more than $1 billion. The startup's founders left the company last September to join Google, leaving employees to take over ownership. If sold, the buyer would get Character.AI's app and website, which hosts chatbots that resemble anime characters, celebrities, and historical figures. Character.AI makes most of its revenue by charging for premium features with its chatbots. It expects to reach $50 million in annualized revenue by the end of the year.

AN OBLIGATION TO INDEPENDENCE

If you own an independent company and you're not greenlighting weird stuff, you're wasting one of life's true pleasures. Independence isn't just about freedom - it's an obligation to try things no board would ever approve. Public companies worth billions can't do what you can do. They need to justify every move, run it past committees, and worry about quarterly earnings. You can fund the oddball ideas, the "this will probably never work but..." experiments that occasionally catch fire. Very few people get to provide cover for strange attempts without asking permission. So if you're in that position and playing it safe, you're missing the entire point of being independent.

ADDING PAYMENTS TO YOUR SAAS PRODUCT: A TACTICAL PLAYBOOK

Payments is the holy grail for SaaS companies - your model says you'll make 2% of millions in transaction volume, and suddenly every board meeting becomes about when you're launching it. This playbook shows why most companies shouldn't even try. You need actual money changing hands in your customers' workflows, which sounds obvious until you realize how many analytics platforms are trying to wedge payments into their product. The winners are boring - software for dentists processing copays, auto mechanics sending invoices, and nonprofits taking donations. This guide covers the math on what you'll actually make, realistic adoption rates, and how to expand from basic payment processing into the lucrative stuff like lending.

NO, AI PROGRESS IS NOT GRINDING TO A HALT

Everyone's declaring GPT-5 a disappointment that proves AI progress is hitting a wall, but they're measuring it wrong. When GPT-4 launched in 2023, it was compared to technology from 2020 - of course, it looked revolutionary. Now GPT-5 is being compared to models released last month. If GPT-4 came out today, it would be dead on arrival. It handled 8,200 tokens versus GPT-5's 400,000, cost 10x more to run, and scored 25/100 on benchmarks where GPT-5 gets 69. On real-world coding tests, GPT-4 solved 2.8% of problems while GPT-5 solved 65%. GPT-4 can handle 5-minute human tasks - GPT-5 can handle tasks that are more than two hours. However, because everyone expected another ChatGPT moment and OpenAI bungled the release, the narrative has solidified in DC that AI is stalling.

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