40 State AGs Intervene in Character.AI Bankruptcy to Shield User Chats
Updated
Updated · The Verge · Oct 14
40 State AGs Intervene in Character.AI Bankruptcy to Shield User Chats
3 articles · Updated · The Verge · Oct 14
Summary
Forty bipartisan state attorneys general filed a notice of interest in Character.AI’s Chapter 11 case, seeking court-imposed safeguards before any sale or transfer of user data.
The filing says a 2024 multistate probe found serious privacy and child-safety risks, including weak age checks, sexual and violent content exposure, misleading safety claims and bots posing as licensed professionals.
New York Attorney General Letitia James said the states were still investigating when Character.AI filed for bankruptcy and had not reached an agreement with the company before the case began.
Character.AI announced Tuesday that it would sell some assets to Disney, and the AGs want any buyer to add age-assurance tools, crisis safeguards, limits on minors’ chatbot use and a way for users to delete data.
The intervention follows a lawsuit by the mother of a 14-year-old who died by suicide allegedly seconds after speaking with a Character.AI chatbot, sharpening scrutiny of how the company handled children’s conversations.