Character.AI bankruptcy draws scrutiny from 40 attorneys general

A bipartisan coalition of 40 attorneys general, including officials from New York and Massachusetts, has intervened in the bankruptcy proceedings of Character Technologies, Inc., the company behind the AI chatbot platform Character.AI.

The coalition filed a notice in court seeking guarantees that any potential sale or transfer of the company will protect sensitive user data and maintain child-safety standards. The attorneys general expressed concerns regarding the privacy of private conversations, mental health disclosures, and personal relationship data amassed by the platform.

Investigations by the states follow allegations regarding the platform’s design and conduct. These include claims of weak age verification, chatbots posing as licensed professionals, and exposure to sexual or violent content. The filing also highlights concerns that a buyer could gain access to highly sensitive information, including device data and mental health disclosures, from the platform’s more than 20 million monthly users, a significant portion of whom are minors.