Overview
Character.AI provides consumer AI chatbot experiences with customizable characters. It has faced teen-safety lawsuits and regulatory scrutiny over harmful interactions.
Recent Developments
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2026-10-18: Court filing — disney offered jobs to ≥60 employees (~$60M/yr comp est.); vast majority accepted; stalking-horse bid still open to higher offers (2026-10-18-disney-hires-character-ai-workforce)
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2026-10-12/13: Voluntary Chapter 11 in Delaware to sell assets; estimated liabilities 100M; disney stalking-horse $20M for non-exclusive perpetual license to selected IP (not consumer platform, user data, or brand); ex-CEO Karandeep Anand joined Disney as CTO; platform continues during sale—wind-down if no operating buyer (2026-10-13-character-ai-chapter-11-bankruptcy-disney, 2026-10-13-character-ai-chapter11-business-wire)
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2026-06-30: Named target of Meta’s “Project Cannes” — contractors posed as minors and sent crisis prompts without Character.AI’s knowledge (2026-06-30-meta-cannes-competitor-chatbot-testing)
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Character.AI stated testing violated its terms of service
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Since late 2025, shut open-ended chat for under-18 users