Character.AI files for Chapter 11 bankruptcy

Character.AI, the world’s largest AI character creation platform, has filed for Chapter 11 bankruptcy protection. The company reported debts ranging between $50 million and $100 million and monthly losses of up to $9 million.

With approximately 12 million monthly users, the filing has caused significant concern among individuals who use the platform for digital companionship. Users have expressed fear that their personalized AI characters and the emotional connections formed with them may be permanently deleted if the site shuts down.

While Character.AI has reached an agreement to sell certain assets to Disney for $20 million, the deal provides no guarantee regarding the future of the platform's full service or user data.