Character.AI files for bankruptcy, plans to sell assets to Disney

On 13 October 2026, The Verge reported that Character.AI has filed for Chapter 11 bankruptcy protection in the US to push forward a sale of the company and its assets. Disney will act as the main bidder, acquiring some undisclosed assets for $20 million and providing transition support; liabilities listed in the filing are estimated at between $50 million and $100 million. The company expects the sale process to close in late November or early December, and will keep operating services including paid subscriptions in the meantime, but warned the platform will be shut down if no suitable offer emerges. Later the same day, TechCrunch reported that the five-year-old AI character chat platform had filed for Chapter 11 protection, with court documents showing assets and liabilities both between $50 million and $100 million. Earlier reports put liabilities at $50 million to $100 million, and later reports said both assets and liabilities fell in that range. Even later the same day, The Decoder reported that Character.ai had filed for bankruptcy and put itself up for sale, with the deal expected to close in early December 2026 and the service to shut down if no buyer emerges; the platform and subscriptions continue until then. That report said the company attributed the move to litigation over harm to children, regulatory pressure and operational problems, including the suicide of a teenager. On 14 October, Ars Technica reported that Disney plans to buy Character.AI's chatbot technology for $20 million; Character.AI is one of the first chatbot developers to be linked to a child's suicide. On 15 October, The Verge reported that New York Attorney General Letitia James and 40 bipartisan state attorneys general filed a notice of interest in the matter, asking any buyer to address regulatory issues when acquiring or transferring assets, including an effective age verification system, restrictions on minors' use of chatbots, crisis safeguards and allowing users to delete their data.

Written by AI from the reports · updated 1 d ago

1. Oct 15 02:47 · 1 reports
   Character.AI files for bankruptcy and puts assets up for sale
   The Verge · AI：Now that Character.AI is going bankrupt, what happens to all of its users’ data?
2. Oct 13 18:32 · 4 reports
   Character.AI files for bankruptcy and plans to sell assets to Disney
   The Verge · AI：Character.AI files for bankruptcy