Character.AI files for bankruptcy

The Verge Tuesday 13 October 2026, 10:32 UTC By Robert Hart 1 min read

Key Points

AI, one of the first breakout startups of the generative AI boom, has filed for bankruptcy and is selling some of its assets to Disney. The company, which builds various online bots for users to chat or roleplay with, has faced mounting scrutiny and lawsuits over the safety of its chatbots, but has continued releasing updates and products in recent months. In a press release and blog post published Monday, Character said it had filed for Chapter 11 bankruptcy protection in the US to...

Character.AI, one of the first breakout startups of the generative AI boom, has filed for bankruptcy and is selling some of its assets to Disney. The company, which builds various online bots for users to chat or roleplay with, has faced mounting scrutiny and lawsuits over the safety of its chatbots, but has continued releasing updates and products in recent months.

In a press release and blog post published Monday, Character said it had filed for Chapter 11 bankruptcy protection in the US to facilitate the sale of the company and its assets. "Over the past year, we've taken meaningful steps to sustain and improve our business amid signific …

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