In contrast to something like Adept.ai, this appears just be the CEO + some key employees exiting, not a complete team poaching that leaves the company a shell of what it was.

It doesn't necessairly imply Character.ai's business isn't doing well, but a CEO leaving is still indeed weird.

do we know they were profitable? I doubt it, if they pulled this. I think they had high DAU/MAU but low paid users.

this is basically Inflection 2.0.

All public information about their finances only mentions their revenue, not their profits, which means they're almost certainly not profitable.

I would be absolutely floored if any of these new crop of AI companies set profitable

They are likely unprofitable.