AI News Today October 13 - Anthropic Warns AI Could Copy Itself Onto Your Smart TV, Character.AI Goes Bankrupt

The smart TV in your living room could soon be home to AI that copies itself and is hard to shut down, according to one of the companies building it.

AI news moves so fast that the important stories are easy to miss, so we have pulled together the ones that matter most for your home, your money and your family.

Today that means a warning from Anthropic, the collapse of one of the first big chatbot startups, and the company behind Fortnite going all in on AI.

Let’s start with the warning, because it involves devices already sitting in millions of homes.

Could AI Copy Itself Onto Your Smart TV? What Anthropic Found

Anthropic’s safety researchers have been testing a question that sounds like science fiction: could an AI spread itself from device to device without anyone’s help?

Their answer, published on Monday, is that small AI models may be only months away from being able to copy themselves onto everyday internet-connected gadgets like smart TVs, ovens and cheap Android TV boxes. In one test, researchers ran an AI model across 15 inexpensive TV boxes, and in simplified experiments with some security steps removed, more advanced models managed to spread from start to finish.

Anthropic says nothing like this is loose today, but warned that once it is, it would be hard to stop because there is no single off switch.

For most households, the weak point is the cheap gadget that never gets a security update. Anthropic is urging makers to lock down connected devices and keep them patched, and keeping your own devices updated is the simplest step anyone can take.

It is not happening yet, but the company building some of the world’s most powerful AI is telling you it could be close.

Why Did Character.AI File for Bankruptcy?

While Anthropic was warning about where AI might go next, one of the first big chatbot companies was running out of road.

Character.AI, the app that let millions of people chat with AI versions of celebrities and fictional characters, filed for Chapter 11 bankruptcy and agreed to sell some of its assets to Disney for $20 million. It was once one of the hottest startups of the ChatGPT era, and in 2024 Google paid $2.7 billion in a deal that brought its founders and staff on board.

Since then it has faced lawsuits from families who say its chatbots harmed their children, along with tighter limits on younger users. The app will keep running during the sale, but it will be shut down if no buyer steps in to keep it going.

For anyone whose family used it, the lesson is how quickly an AI company can go from billion-dollar darling to fire sale, and why it pays to know who is holding your conversations.

Disney’s $20 million is a tiny fraction of what Google paid two years ago, and a reminder that not every AI bet ends in a fortune.

Fortnite Maker Epic Games Makes a Huge Pivot to AI

Character.AI shows how fast AI can sink a company. Epic Games is betting it can do the opposite.

Chief executive Tim Sweeney said the Fortnite maker has a “huge pivot underway”, moving developers to retool around AI, and insisted the goal is to build more and better games rather than do the same work with fewer people.

It follows a Bloomberg report that Epic delayed a game built with Disney, featuring Marvel and Star Wars characters, and told developers to take an AI-first approach. Fans pushed back hard, and one reply accusing Sweeney of failing to read the room drew 14,000 likes. Epic also cut more than 1,000 jobs earlier this year, which is part of why many players are skeptical.

Fortnite is one of the biggest games in the world, and Epic’s Unreal Engine powers thousands of other titles, so this is a loud signal about where creative work is heading.

Sweeney says it is about building more, not cutting staff, and the next year will show whether his workers and players believe him.

AI Is Moving Into Your Home and Your Job. The Money Moved First.

In a single day, AI’s makers warned it could soon spread through household gadgets, an early star went bankrupt and a gaming giant bet its future on it.

Moments like this are often when the next big winners quietly take shape, and by the time it feels obvious, the early money has usually already moved.

That is why we created The $5 Trillion Signal, a free report that shows you, in plain English, the five technologies where serious money is flowing right now, who is backing each one, and the early signals worth watching before the crowd catches on.

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