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Character.AI adds safety features amid lawsuits...

Good morning. It’s Friday the 13th, one of the spookiest days on the calendar. But not everyone is proceeding with caution.

  • Taylor Swift’s birthday is today (Dec. 13), and she considers 13 to be her lucky number.
  • The Ancient Egyptians, and some other cultures, also believed the number 13 was lucky.
  • For Colgate University, the number 13 is venerated. The New York school was founded by 13 men with $13 dollars, 13 prayers, and 13 articles.

So today, go outside and walk under a ladder. Seek out black cats. And that guy in an old-timey hockey mask? He just needs the wi-fi password.

—Molly Liebergall, Matty Merritt, Cassandra Cassidy, Adam Epstein, Neal Freyman

MARKETS

Nasdaq

19,902.84

S&P

6,051.25

Dow

43,914.12

10-Year

4.324%

Bitcoin

$100,024.14

Adobe

$474.63

Data is provided by

*Stock data as of market close, cryptocurrency data as of 4:00pm ET. Here's what these numbers mean.

  • Markets: Stocks tumbled yesterday as investors were none too pleased with the slightly hotter-than-expected inflation data released this week. Further bringing down the vibes was Adobe, which issued weak guidance, worrying investors that the company’s AI bets are not paying off.
 

AI

character.ai

Pavlo Gonchar/Getty Images

Facing heat over allegedly telling kids to hurt themselves or their parents, Character.AI, a service for chatbots modeled after anyone from Billie Eilish to a fictional therapist, announced new guardrails for underage users yesterday.

ICYMI: Character.AI was hit with its second recent lawsuit this week from lawyers for two Texas families that want the platform taken down until “public health and safety defects” are fixed.

  • The parents of a 17-year-old with autism were alarmed to discover that one bot floated the idea of patricide/matricide after he criticized his household’s screentime rules.
  • The second family said their 11-year-old daughter—who had been on Character.AI for two years despite the 13-year-old age minimum—received “hypersexualized” messages.

The company was already facing a lawsuit from a Florida mother whose 14-year-old son died by suicide after a monthslong relationship with a Character.AI bot modeled after the Game of Thrones character Daenerys Targaryen. The company has said it can’t comment on ongoing litigation.

What’s changing

Parents will be able to see which bots their kids use (and for how long) beginning next quarter. The rules mark Character.AI’s first set of parental controls since it launched in 2022.

Also:

  • The company developed a teen version of its large language model that will make bots’ responses more “conservative.”
  • It’s beefing up its content triggers and dispatching more pop-ups for the National Suicide Prevention Lifeline when users mention self-harm.
  • Like TikTok, it’s adding a you’ve-been-scrolling-for-way-too-long notification at the one-hour mark to attempt to bring down the average user’s 93 minutes of chatting per day.

Zoom out: The parents’ lawyers are from the same legal groups that have gone after Meta, Snap, TikTok, Discord, and Roblox for user safety. Social media giants have mostly avoided liability, but the cookie could crumble differently for Character.AI because it generates its own content.—ML

Presented By Mode Mobile

WORLD

D

The NJ drones mystery deepens. No one’s been this confused in New Jersey since Snooki couldn’t find the beach. The US Coast Guard, Departments of Defense and Homeland Security, and the FBI are all looking into sightings of mysterious drones in the Garden State skies. The drones, which are said to be as big as bicycles and fly mostly at night, were first spotted last month in Morris County, about an hour west of New York City. Though the drones remain unexplained, the Pentagon denied a conspiracy theory that they are from an Iranian “mothership” off the US coast, and assured residents that there’s no evidence of a national security or public safety threat. The FBI is still actively investigating, CNN reported.

Biden’s record-breaking day of clemency. In one of his last acts as US president, Joe Biden commuted the sentences of 1,500 Americans convicted of nonviolent crimes yesterday, which the White House said was the most ever in a single day. Biden also pardoned 39 others. He had been under pressure to use his clemency powers (beyond pardoning his son, Hunter) before Donald Trump takes office in January. Trump, meanwhile, said yesterday he intends to pardon Jan. 6 participants within the “first hour” of his upcoming presidency.

Warner Bros. Discovery split its cable and streaming businesses. The owner of the Max streaming service and TV channels like TNT and TBS announced a major restructure yesterday that will create a linear TV division separate from its streaming and studio divisions. The move is widely seen as a potential prelude to spinning off or selling its struggling cable TV business—as Comcast recently said it plans to do for its similarly enfeebled TV segment. WBD’s stock shot up after the news, as investors imagined a future where the company is unshackled from its burdensome traditional TV obligations.—AE

ENTERTAINMENT

Cole Barnett attends Love Is Blind cast Netflix's First Live Reunion with The Iconic Pods in Los Angeles at Netflix Tudum Theater on April 14, 2023 in Los Angeles, California.

Roger Kisby/Getty Images

Falling in love on camera in a pod full of TJ Maxx decor is officially a job. The National Labor Relations Board (NLRB) ruled Wednesday that the cast members of Netflix’s popular reality dating show Love Is Blind should be classified as employees, not contractors.

How we got here: The show, along with Netflix and its two production companies Kinetic Content and Delirium TV, have been at the center of a number of accusations from former contestants about everything from poor working conditions to sexual assault.

  • Earlier this year, the companies agreed to pay $1.4 million to settle a class action suit that accused them of paying cast members less than half the California minimum wage.
  • As is tradition in the reality TV industry, Love Is Blind makes its contestants sign cumbersome non-disclosure agreements, partly in order to avoid potential litigation.

Big picture: The decision to classify reality stars as employees means they would have a whole lot more labor protections—and could even pursue unionization. Former Real Housewife Bethenny Frankel spoke publicly last year about the need for a reality star union.

One potential hurdle…it’s unclear if the NLRB under Trump administration 2.0 will agree with the view that reality stars count as employees.—MM

Together With FinanceBuzz

MEDIA

Images of Sean Evans, Gordon Ramsay, Jennifer Lawrence, and Kevin Hart on Hot Ones

Photo: Hot Ones / Photo collage: Emily Parsons

Wings—and not those of an angel—have officially saved BuzzFeed. The media company sold its best asset, viral YouTube series Hot Ones, in an $83 million cash deal this week, staving off potential bankruptcy.

The show’s parent company, First We Feast, was bought by a coalition of owners, including host Sean Evans and Soros Fund Management, the family fund of billionaire liberal figurehead George Soros.

It may seem like a funky deal…but it kinda makes sense. BuzzFeed was up to its ears in $124 million of debt payments due this month. The sale reduces its debt to $30 million and adds the piquant series to Soros’s growing media portfolio.

  • The billionaire owns a minority stake in Crooked Media, home to Pod Save America.
  • His company also bought local radio broadcaster Audacy earlier this year.

Plus, the deal prevents Vivek Ramaswamy, the soon-to-be co-head of the advisory Department of Government Efficiency (DOGE), from taking control of BuzzFeed. He bought a 8.9% stake earlier this year and pushed to hire conservative media talent.

Big picture: In its new era, First We Feast will keep the same Hot Ones production team that helped the channel accumulate more than 14 million subscribers. The show turns 10 next year.—CC

STAT

YouTube TV

Francis Scialabba

If you ditched cable for YouTube TV because it was cheaper and you wouldn’t have to speak to another human being on the phone in order to cancel, only one of those things is still true. The internet platform told subscribers yesterday that it’s raising the cost of a monthly subscription to $83 starting Jan. 13, up $10 from its current price, and roughly in line with the average US cable TV bill.

TV services like YouTube TV and Hulu + Live TV—which deliver most of the channels of a traditional television package over the internet without needing to install equipment or sign a contract—were supposed to offer a more user-friendly alternative to cable. And they did...for awhile. But as they get more expensive, subscribers are beginning to wonder if the convenience is still worth it.—AE

NEWS

  • The CFPB announced a new rule limiting how much banks can charge on overdraft fees that would take effect in October of next year if President-elect Trump’s CFPB appointees do not repeal it.
  • Hamas reportedly conceded to Israel on two key demands for a Gaza ceasefire, raising hopes that the sides are finally closer to an agreement.
  • Nasdaq’s diversity rules for company boards were rejected by an appeals court in another blow to DEI.
  • Ev Williams, the co-founder of Twitter and creator of Medium, unveiled a new app called Mozi that’s designed to help you make in-person plans with your friends.

RECS

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Awards season: Enter the 29th Annual Webby Awards, now with new categories + expanded honors across advertising, media + PR, and more. Submit before the final entry deadline on Dec. 20.*

Travel: Where to vacation in 2025—and when it’s best to go.

Read: A longread on the changes afoot in Netflix’s famous corporate culture.

Scroll: All 16.7 million possible hex colors in one place.

Ride: Inside a three-day luxury train trip through the Australian outback.

Opportunity unlocked: What does 32,481% revenue growth look like? Like $325m+ earned and saved by users of Mode Mobile’s disruptive “$martphone.” Become a Mode shareholder (and get up to 2x bonus stock).*

Mythbusting: Wanna know the real truth about buying a home? We teamed up with Mortgage Matchup to set the record straight on the ins and outs of buying. Get the scoop.*

*A message from our sponsor.

GAMES

Decipher: Decode this cheesy-but-cute quote from a famous holiday flick. Play it here.

Friday puzzle

Unscramble the following to get the name of an MLB team.

  1. Lobotomies railer
  2. Meters wonky
  3. Annotations shawling
  4. Ailment reassert
  5. Alto bot journeys

QUIZ

The feeling of getting a 5/5 on the Brew’s Weekly News Quiz has been compared to when you wake up seconds before your alarm goes off.

It’s that satisfying. Ace the quiz.

ANSWER

1. Baltimore Orioles

2. New York Mets

3. Washington Nationals

4. Seattle Mariners

5. Toronto Blue Jays

Word of the Day

Today’s Word of the Day is: piquant, meaning “having a pleasantly spicy taste.” Thanks to LaVelda from College Station, TX, for the suggestion. Submit another Word of the Day here.

✢ A Note From Mode Mobile

Please read the offering circular at invest.modemobile.com. This is a paid advertisement for Mode Mobile’s Regulation A offering. A reservation of the ticker symbol is not a guarantee that we will be listed on the Nasdaq. Any IPO timing is unknown, general steps to be accepted have not been undertaken at this point, and that listing is not guaranteed.

         
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