Character.ai files for bankruptcy and will shut down if no buyer emerges
Character.ai will shut down if no buyer emerges, capping a fall from $2.7 billion Google deal to bankruptcy
What happened
Character.ai has filed for bankruptcy and is seeking a buyer, with a deal expected to close by early December 2026; without one, the service will shut down. The platform and subscriptions remain operational until then, and the company attributes its situation to lawsuits over harm to children, regulatory pressure, and operational problems. Disney is acquiring some assets for $20 million, including a perpetual, non-exclusive technology license, following Google's $2.7 billion deal in 2024.
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