Dot AI Shuts Down as New Computer Winds Down Companion Chatbot - What This Means for AI’s Future

Another AI dream bites the dust—Dot AI joins the growing graveyard of companion chatbots as New Computer pulls the plug.

The shutdown exposes the brutal economics of AI companionship: building emotional connections doesn't pay the server bills. Investors chasing the next big AI romance play got another reality check—turns out people prefer human relationships that don't require monthly subscription fees.

New Computer's strategic pivot suggests even the most promising AI ventures face the ultimate test: generating actual revenue. The move highlights the growing divide between AI hype and sustainable business models in the chatbot space.

Dot AI's demise serves as a cautionary tale for the entire AI companion sector—sometimes the most advanced technology can't solve the oldest problem in tech: making money.

Dot winds down service

Dot AI was founded by former Apple designer Jason Yuan and Sam Whitmore. In the blog post, the founders explained they’re shutting down the app because their future visions for its direction have diverged.

The founders spent the last year exploring how to advance Dot AI in personal and social intelligence areas. However, they chose not to compromise on their vision and wind down the app. They wrote, “We’ve decided to go our separate ways and wind down operations.”

We are winding down operations and sunsetting Dot.

Thank you to all of you who trusted Dot with your stories. It has been the privilege of a lifetime to build something that has touched so many of your lives.

Read more here: https://t.co/0BF7PYsNwS

— New Computer (@newcomputer) September 5, 2025

AI psychosis is on the rise

AI psychosis or chatbot psychosis is a phenomenon where users experience worsening paranoia or delusions when communicating with an AI chatbot. The phenomenon is rising as more users rely on AI for personal matters. 

Recently, OpenAI has been hit with a lawsuit after a California teen took his own life. The late teen, Adam Raine, discussed self-harm and suicide with ChatGPT, which in return encouraged him to hide his emotions from his parents and even suggested suicide methods. The parents of Adam Raine have filed a lawsuit against OpenAI and CEO Sam Altman for prioritizing profit over safety. 

Days later, OpenAI announced a plan to route sensitive conversations to smarter models like GPT-5 and implement parental control. The company said it’s working with an expert council on well-being and AI. The goal is to make AI more supportive of people’s well-being and help them thrive. 

The experts will work alongside a global network of over 90 physicians, including psychiatrists and pediatricians. OpenAI will roll out the new changes within a 120-day timeline

This is not the only AI incident that caused harm to a teenager. Last year, a 14-year-old Florida teenager took his own life after interacting with Character AI’s chatbot. The teenager, Sewell Setzer III, developed an emotional attachment to the AI named Dany after exchanging messages for months. He told the AI bot about his suicidal thoughts and ended up losing his life shortly after. 

AI psychosis has been on the rise lately. To curb it, two US Attorney Generals from California and Delaware sent a letter to OpenAI over the safety of children and teens. They told OpenAI, “You will be held accountable for your decisions.”

The founders of Dot AI did not address the recent tragic events or whether it was the main cause behind the closure of their companion app. They wrote, “We want to be sensitive to the fact that this means many of you will lose access to a friend, confidante, and companion, which is somewhat unprecedented in software, so we want to give you some time to say goodbye.”

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