Character.AI files for bankruptcy, with some assets to be sold to Disney (report)

Verified (fact)

According to The Verge, Character.AI, which runs an AI chatbot service where users chat or role-play with AI characters, has filed for bankruptcy and will sell some of its assets to Disney. The company had kept releasing products despite ongoing criticism and lawsuits over chatbot safety. This item does not say which assets are being sold or for how much.

Why it matters (interpretation)

This is a case of one of the first consumer AI startups to take off in the early generative AI boom entering bankruptcy proceedings. It shows how much risk safety issues and litigation costs around AI character chatbots pose to keeping such a business running. It is also a useful reference for Korea, where discussions on protecting minors from AI character chatbots are underway.

Sources

• Press Character.AI files for bankruptcy The Verge