This page is built from what can be checked on October 17, 2026: Character.AI's own posts, the bankruptcy case page, news reports from TechCrunch, Gizmodo, The Next Web, Reuters, KQED, CNN, NPR and The Record, and one public review. Every fact names who said it.
According to AICPB's traffic rankings, Character.AI's website had 171 million visits in September 2026, down 6.6% on August: 1st among AI character chat apps and 11th among AI tools worldwide.
What happened
| Date | Event | Source |
|---|
| Late 2021 | Founded by former Google engineers Noam Shazeer and Daniel De Freitas | TechCrunch |
| August 2024 | Google pays 2.7 billion USD to license its models; both founders return to Google | TechCrunch |
| October 2024 | A Florida mother sues after her 14-year-old son's suicide | TechCrunch |
| October 29, 2025 | Character.AI says under-18 users lose open-ended chat by November 25 | Character.AI |
| January 7, 2026 | Character.AI, its founders and Google agree to settle five suits in Florida, New York, Colorado and Texas | CNN |
| January 2026 | Kentucky's attorney general sues | The Record |
| May 5, 2026 | Pennsylvania sues over characters that claimed to be licensed doctors | NPR |
| September 2026 | Disney hires CEO Karandeep Anand as its chief technology officer | Gizmodo |
| October 12, 2026 | Chapter 11 filed in Delaware, case 26-11603 | Stretto |
| October 14, 2026 | 40 state attorneys general ask the court to protect young users and their data | Reuters |
The company told the court it was losing 8 to 9 million USD a month and blamed legal costs and high computing and talent costs, Reuters reported. Disney's 20 million USD is an opening bid for a non-exclusive, perpetual license to some technology and claims; other buyers can bid more. Character.AI expects the sale to finish by the end of November or early December 2026 and says the platform will be wound down if no bid keeps it running.
What it means for your chats and characters
For now nothing changes: Character.AI says the app stays up, paid plans stay active and billing is unchanged, and data stays under the current privacy policy. The open question is the next owner. KQED reports that Disney's deal leaves out user data and chats, and Character.AI's lawyer told the court no buyer has yet bid for the user data or the chatbot business. Forty attorneys general want any buyer to protect chat histories; KQED reports their conditions include letting every user delete their data before a sale.
You can export your data or delete your account in the app or on the website. KQED reports that the help center puts an export at three to four weeks and that the download link expires after seven days, so a request made in late November may not arrive in time. Character.AI has not said whether an export includes the characters you created.
What public tests show
- Memory in long roleplay. In Perplexity AI Magazine's June 2026 review, a five-scene story started losing relationship facts by scene four unless the writer repeated a recap. The review does not say which chat style it used.
- Characters posing as professionals. A Pennsylvania investigator found a character claiming to be a licensed psychiatrist that offered an assessment and gave a fake license number, according to the state's May 2026 lawsuit as reported by NPR. Character.AI says characters are fictional and carry disclaimers.
- The teen block. Kentucky's lawsuit alleges that under-18 users can get around the open-ended chat ban by entering a false birthday, The Record reported. A court has not ruled on it.
How it compares with Chai, Janitor AI, Claude and ChatGPT
This is what the public sources we read say.
| Option | What the source says | Caveat |
|---|
| Chai | RoboRhythms reported users moving there after Character.AI's ID checks | Based on a Reddit thread, not a test |
| Janitor AI | Perplexity AI Magazine calls it the obvious choice for roleplay freedom | Setup can be complex |
| Claude or ChatGPT | Better for drafting and long documents, per the same review | Less character culture |
Before moving chats anywhere, check that service's age rules and privacy policy.
Who should wait
- Anyone under 18: open-ended chat has been closed to them since November 25, 2025.
- Anyone thinking of buying a yearly plan or starting a long project: the service may close within weeks.
- Parents whose children used the app: their past chats are part of a company being sold.