State attorneys general seek user data protections in Character.AI’s bankruptcy sale
Now that Character.AI is going bankrupt, what happens to all of its users’ data?
What happened
Forty bipartisan state attorneys general are seeking safeguards for consumer data in Character.AI’s bankruptcy proceeding after the company announced Tuesday it was filing for Chapter 11 and selling some assets to Disney. New York Attorney General Letitia James revealed a multi-state investigation opened in 2024 into consumer protection and privacy concerns. The states want any purchaser to implement age assurance, restrictions on minors’ chatbot interactions, crisis safeguards, and options for users to delete their data.
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