US states seek children's data protections in Character.AI bankruptcy
Source: CNA
Published on: 2026-10-14 21:14
Oct 14 : A group of 40 state attorneys general on Wednesday urged a US bankruptcy judge in Delaware to protect young users of Character.AI and keep their data safe during the AI companion company's bankruptcy. Character.AI filed for bankruptcy late on Monday and is seeking to use its Chapter 11 case to resolve the states' investigations and lawsuits, license its technology to Disney for $20 million, and seek a buyer willing to take on its chatbot business. Abigail Ryan, an attorney for the states, told US Bankruptcy Judge Brendan Shannon in Wilmington that the states are negotiating a settlement with Character.AI over allegations that its chatbots impersonated licensed medical professionals and exposed children to sexualized and abusive interactions. Even so, Ryan said, the states want to make sure that any buyer of Character.AI's assets will protect users' chat histories and improve ...
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