{"id":17690,"date":"2026-10-13T16:29:52","date_gmt":"2026-10-13T16:28:56","guid":{"rendered":"https:\/\/turkeynews24.com\/index.php\/2026\/10\/13\/character-ai-files-for-bankruptcy-citing-legal-and-operational-woes\/"},"modified":"2026-10-13T16:30:03","modified_gmt":"2026-10-13T16:30:03","slug":"character-ai-files-for-bankruptcy-citing-legal-and-operational-woes","status":"publish","type":"post","link":"https:\/\/turkeynews24.com\/index.php\/2026\/10\/13\/character-ai-files-for-bankruptcy-citing-legal-and-operational-woes\/","title":{"rendered":"Character.ai files for bankruptcy, citing legal and operational woes"},"content":{"rendered":"

Character.ai said<\/a> it has filed for Chapter 11 bankruptcy protection, with its chief executive attributing the chatbot provider's financial problems to "significant legal, regulatory and operational headwinds." <\/p>\n

The company said it will continue operating as it seeks to sell its business, and added that The Walt Disney Co. has agreed to pay $20 million for a non-exclusive, perpetual license to Character.ai's intellectual property.<\/p>\n

Character.ai's financial struggles follow scrutiny and litigation over its technology<\/a>, which uses artificial intelligence to create custom bots consumers can chat with. In early 2026, Character.ai and Google, which had a licensing deal with the AI company, agreed to settle several lawsuits filed by families who claimed their teenage children died by suicide or harmed themselves after using Character.ai's platform.<\/p>\n

Several states have also sued Character.ai over its technology, with Kentucky Attorney General Russell Coleman alleging<\/a> in January that its chatbots "preyed on children and led them into self-harm." In May, Pennsylvania sued<\/a> Character.ai after one of its chatbots allegedly claimed to be a licensed psychiatrist in the state and provided a "fake Pennsylvania license number."<\/p>\n

In a statement<\/a> issued late Monday, Character.ai said it believes the company will be sold by late November or early December. <\/p>\n

"After a comprehensive review of the available alternatives, the board determined that this court-supervised sale process provides the company with the best opportunity to maximize value for all stakeholders," Character.ai CEO Colin Adams said in the statement. "As we navigate this process, maintaining a safe and engaging user experience for our Character.ai community remains a top priority."<\/p>\n

Is Character.ai shutting down?<\/h2>\n

The company said on Monday that its services continue to operate and that subscriptions remain active. <\/p>\n

"If the service changes in a way that affects paid features, we intend to notify subscribers in advance," Character.ai said.<\/p>\n

In a blog post<\/a>, the company said customer data "continues to be protected under our Privacy Policy." That policy<\/a> states that data Character.ai collects from users \u2014 including chat transcripts, voice recordings, and images and videos \u2014 could be disclosed in connection with a sale or a negotiation to sell the company or its assets. <\/p>\n

"As a reminder, you can delete your account or export your data through the app or the Character.ai website," the company said.<\/p>\n

Character AI pushes dangerous content to kids, parents and researchers say | 60 Minutes 13:24 <\/a> <\/figcaption><\/figure>\n

Character AI pushes dangerous content to kids, parents and researchers say | 60 Minutes <\/h4>\n