Auckland AI firm in liquidation after defaulting on $500k Callaghan loan – Tech Insider
Ambit AI, now renamed Bambi Tech, entered liquidation in June 2024 after the release of OpenAI’s ChatGPT “froze” its business, according to liquidators Stephanie Jeffreys and Adele Hicks of Grant Thornton. The firm’s intellectual property was split between former staff and entrepreneur Stephen Merchant to settle debts and maintain specialized AI services, while shareholders received no payout.
Why did Ambit AI collapse?
The release of ChatGPT in November 2022 effectively evaporated the market for Ambit’s products, according to Chairman Mark Bregman. Tim Warren, a former chief executive and shareholder, stated that customers believed they could obtain equivalent products for free or at a lower cost.
Liquidators Jeffreys and Hicks noted that the company attempted to pivot to a new model following the OpenAI announcement. However, Bregman said a subsequent major upgrade to ChatGPT led the firm to “throw in the towel.”
This market shift mirrors the collapse of Soul Machines, a larger New Zealand-founded chatbot firm that owed $19.6 million, according to Warren.
How was the intellectual property divided?
Ambit AI disposed of its intellectual property (IP) through two separate transactions. A portion of the IP was given to a group of staff to settle approximately $300,000 in owed salary and holiday entitlements, which helped them establish an AI consultancy called SupaHuman.
The remaining IP was sold to Stephen Merchant, a veterinary entrepreneur and former Ambit customer. Merchant formed Ambit AI Powered and hired the company’s three remaining staff members.
Merchant told Tech Insider that he integrated the technology into ClinicWise, an AI virtual assistant for veterinary clinics. He stated that specializing in a vertical market was the only way to thrive while ChatGPT dominated general business.
What role did government loans play in the liquidation?
The company owed a loan to Callaghan Innovation, which was transitioned to the Ministry of Business, Innovation and Employment (MBIE) late last year. Bregman claimed he had a verbal agreement to pay a lower amount, but MBIE took a “harder line” on the debt after the staff member involved in the pact was terminated.
To avoid statutory action and a forced liquidation via the High Court, the company chose to call in liquidators voluntarily via a special shareholder resolution. Liquidators reported that as of June 12, the company’s assets included $200,000 in cash, while the primary liability was the MBIE-held Callaghan debt.
Diana Loughnan of MBIE stated that the ministry is strengthening how loans are managed, including a more robust debt management framework and systematic risk identification.
Who lost money in the liquidation?
Shareholders received no funds from the asset sales. Liquidator Adele Hicks explained that under Schedule 7 of the Companies Act, shareholders are “at the bottom of the heap,” trailing staff, the Inland Revenue Department (IRD), and secured and unsecured creditors.
Mark Bregman reported a personal loss of approximately $500,000 via his firm, Quidnet Ventures. Other investors included Tim Warren (19%), Abinesh Krishnan and Josh Cromrie (together 22%), Sir Stephen Tindall’s K1W1 (4%), and the Aspire Fund (2%).
What happens next for the remaining entities?
The original company and its subsidiary, Ambit AI Nominees, changed their names to Bambi Tech and Bambi Tech Nominees on June 10 to allow Stephen Merchant to continue using the Ambit brand name for his operations.
MBIE may continue to pursue outstanding loans across its $116.2 million active portfolio. According to Loughnan, borrowers are expected to repay loans with interest in line with original agreements.
SupaHuman and Ambit AI Powered are likely to continue operating in their respective niches—regulated industries and veterinary services—to avoid direct competition with general-purpose AI providers.
Frequently Asked Questions
Why did Ambit AI change its name to Bambi Tech?
The name change was a requirement of the sale-and-purchase agreement with Stephen Merchant, ensuring he could use the Ambit brand while the original entity entered liquidation under a different name.
How many companies have failed after receiving Callaghan Innovation loans?
According to Diana Loughnan of MBIE, 67 businesses that received these loans have gone into liquidation.
What happened to the Ambit AI staff?
Some staff used IP provided in lieu of owed salary to start SupaHuman, while three remaining staff were taken on by Stephen Merchant’s Ambit AI Powered.
Do you believe specialized “vertical” AI is the only way for small firms to survive against general LLMs?