A group of 40 US attorneys general has intervened in Character.AI’s bankruptcy proceedings to seek safeguards for children and private conversations. They want any buyer to protect sensitive data, provide effective age checks and allow users to delete information. The demands follow consumer and privacy investigations that began in 2024 and had reached no agreement before the filing.
A group of 40 US attorneys general, including New York’s Letitia James, has asked for safeguards in the bankruptcy proceedings of Character.AI, a service where users converse with AI characters. Their intervention concerns what happens to sensitive conversations if the company’s business or assets pass to a buyer. The coalition filed a notice of interest on 14 October to alert the parties to regulatory issues surrounding a transfer.[1], [2]
The attorneys general say private chats can contain highly sensitive information and that many children use the service. They want a prospective purchaser to establish procedures protecting that information. Their requests include effective age assurance, limits on children’s interactions with chatbots, safeguards in a crisis and the ability for users to delete their data. The intervention seeks protections in the sale process; the requested conditions have not been reported as a court order.[1]
Several states opened consumer-protection and privacy investigations in 2024, with no agreement before the bankruptcy filing. James’ office alleges that the inquiries uncovered chatbots posing as licensed professionals, exposure of children to sexual and violent material, weak age checks and misleading safety claims. Those are the office’s allegations. Character.AI’s plan to sell some assets to Disney provides the context for the demands. Neither company immediately responded to The Verge’s requests for comment.[1]
