Character.ai announced on its blog that it has initiated a voluntary Chapter 11 bankruptcy process to facilitate a court‑supervised sale of the company. According to the update, the move follows a year of efforts to sustain and improve the business amid significant legal, regulatory, and operational headwinds. After reviewing available alternatives, the board determined that a court‑supervised sale offers the best chance to maximize value for stakeholders and to continue serving the platform’s users.
The company said the goal of the filing is to pursue a sale of all or substantially all of its assets under court supervision. If an actionable bid emerges, the Character.ai platform could continue operating under new ownership; if no suitable bid is found, the platform may be wound down. Throughout the process, maintaining a safe and engaging experience for the community remains a top priority.
Character.ai expects the court‑supervised sale process to be complete by the end of November or perhaps early December 2026. In the meantime, the platform remains up and running, and users can continue to access all services. The company confirmed that paid subscriptions stay active and billing is unchanged for now, with any future changes to paid features to be communicated in advance.
Regarding user data, Character.ai stated that information continues to be protected under its existing Privacy Policy, and its data privacy and security practices have not changed. Users retain the ability to delete their accounts or export their data through the app or website.
To address community questions, the company provided an FAQ covering the reasons for the filing, the expected timeline, what the situation means for users, subscription status, and data handling. Additional details, including the full press release and court filings, are available via the links provided in the blog post, which direct readers to a website administered by Character.ai’s claims and noticing agent, Stretto, Inc.
Character.ai emphasized that, as the bankruptcy process moves forward, it will keep the community informed and will work to preserve the platform’s functionality and user safety.