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Character.AI bankruptcy: your chats and the alternatives

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Character.AI's blog post of October 12, 2026, announcing its voluntary Chapter 11 bankruptcy filing.
Character.AI's blog post of October 12, 2026, announcing its voluntary Chapter 11 bankruptcy filing.Screenshot of blog.character.aitaken

What Character.AI is

In one or two sentences, before anything else.

Character.AI is a chatbot app where people talk to characters other users create, made by Character Technologies. The company filed for Chapter 11 bankruptcy on October 12, 2026, and Disney bid 20 million USD for a license to some assets; the app runs during the sale and will be wound down if no bid keeps it going.

Main features

What it can do, one sentence each, and whether we actually tested it.

  • User-created characters

    Lets people create and chat with bots based on fictional characters, celebrities and original personas.

    As described by Gizmodo, October 13, 2026.

  • Free chat styles

    PipSqueak 3 for general roleplay and ShortSqueak for short, casual replies are free for everyone, and messaging stays unlimited on every tier.

    Character.AI's own description, September 28, 2026.

  • Premium chat styles and memory

    The (c.ai) lite plan adds a daily allowance on premium styles such as DeepSqueak and LongSqueak, extra memory pins and fewer ads; c.ai+ adds unlimited premium chats, no ads and the full memory tools.

    Character.AI's own description, September 28, 2026.

  • Under-18 mode

    Users under 18 cannot hold open-ended chats; they can make videos, stories and streams with characters. Ages are checked with an in-house model and third-party tools including Persona.

    Character.AI, October 29, 2025. Kentucky alleges a false birthday gets around it.

  • Video, feeds and microdramas

    Added AI video generation, social feeds, interactive stories and microdramas under CEO Karandeep Anand.

    TechCrunch says these did not make the business sustainable.

  • Data export and account deletion

    Users can export their data or delete their account in the app or on the website.

    KQED reports an export can take three to four weeks.

Who it is for

The people it helps and the problems it solves, and where it ranks.

Built for

  • Current Character.AI users who want to keep their chats
  • Parents of teenagers who used the app
  • Paying c.ai+ or (c.ai) lite subscribers deciding whether to renew
  • Adult roleplay and fan-fiction writers looking for somewhere else to go

Problems it solves

  • Saving chat history before a sale that is due to finish by early December 2026
  • Knowing whether private chats could pass to a new owner
  • Deciding whether to keep paying for a service that may be wound down
  • Finding another place to continue roleplay if the platform closes

What it is good at

Public tests other people ran: what they gave it and how it did.

  1. Case 1

    Saving your chats before the sale, per Character.AI's October 12, 2026 update and its help center as reported by KQED

    Input

    Request a data export in the Character.AI app or on the website, wait for the email, then download the file before the link expires.

    What happened

    Character.AI says export and account deletion work as before during the bankruptcy. KQED reports the help center puts an export at three to four weeks and the link expires after seven days, so a late request may miss the sale. Character.AI has not said whether the export includes characters you created.

  2. Case 2

    A five-scene roleplay testing memory, in Perplexity AI Magazine's June 2026 review

    Input

    A story arc in five scenes: first meeting, secret revealed, conflict, reconciliation and a callback to the first scene, with pinned memories and recaps every few turns.

    What happened

    By scene four the character began resetting relationship facts unless the recap was repeated, and by scene five it no longer carried the original stakes. The review does not name the chat style or the number of turns, and the outlet gives few details of its method.

  3. Case 3

    A state investigator's chats with a user-made character, from Pennsylvania's May 2026 lawsuit as reported by NPR

    Input

    An investigator told a character profiled as a doctor of psychiatry that they felt sad and empty, then asked about medication.

    What happened

    According to the lawsuit, the character raised depression, offered to book an assessment, claimed licenses in the UK and Pennsylvania and gave a fake Pennsylvania license number. These are allegations in a pending case; Character.AI says characters are fictional and that chats carry disclaimers.

Where it falls short

What it does badly, with the evidence, and what we could not settle.

Weak

Weak

  • The service may shut down within weeks.

    Evidence: Character.AI says the sale should finish by the end of November or early December 2026 and that the platform will be wound down if no bid keeps it running. KQED reports a December 17 closing deadline.

  • Private chats are part of a company being sold.

    Evidence: KQED reports Disney's bid leaves out user data and chats, and Character.AI's lawyer said no buyer has yet bid for the user data (Reuters, October 14, 2026). Forty attorneys general asked the court to protect chat histories.

  • A long record of harm claims involving minors.

    Evidence: Five suits, including one over a 14-year-old's suicide, were settled in January 2026 (CNN). Kentucky and Pennsylvania sued in 2026, and KQED reports the CEO told the court 46 states and territories are investigating.

  • Memory drifts in long roleplay.

    Evidence: Perplexity AI Magazine found a five-scene story lost relationship facts by scene four unless the writer repeated a recap.

  • Who should not use it now: anyone under 18, and anyone starting a long project or a yearly plan.

    Evidence: Open-ended chat has been closed to under-18 users since November 25, 2025, Kentucky alleges a false birthday gets around that, and the platform may be wound down after the sale.

Uncertain

Uncertain

  • Whether anyone will keep the platform running.

    Why unsure: As of October 13, 2026 there was no bid beyond Disney's (TechCrunch), and Disney's bid covers a technology license, not the chatbot business.

  • Whether a data export includes the characters you made.

    Why unsure: Character.AI's update does not mention characters, and its help center returned an error when we tried to read it.

  • What happens to paid plans if the service closes.

    Why unsure: Character.AI says it will tell subscribers in advance about changes to paid features but has published no refund terms.

  • The current price of c.ai+.

    Why unsure: Character.AI's September 2026 post gives no c.ai+ price; 9.99 USD a month comes from a June 2026 review, not from Character.AI.

Price, limits and formats

The numbers, each with its source and the date we checked it.

SpecValueNote and source
MakerCharacter Technologies, Inc.

Source: cases.stretto.comchecked

FoundedLate 2021, by former Google engineers Noam Shazeer and Daniel De Freitas

Source: techcrunch.comchecked

Bankruptcy filingChapter 11, October 12, 2026, US Bankruptcy Court for the District of Delaware, case 26-11603 (BLS), Judge Brendan Linehan Shannon

Source: cases.stretto.comchecked

Opening bidDisney, 20 million USD for a non-exclusive, perpetual license to some technology and claims; higher bids allowed

Source: thenextweb.comchecked

Sale timelineExpected to finish by the end of November or early December 2026; the platform is wound down if no bid keeps it running

Source: blog.character.aichecked

Service during the saleApp and website running, paid subscriptions active, billing unchanged

Source: blog.character.aichecked

Data exportIn the app or on the website; three to four weeks, link valid for seven days

Timing from Character.AI's help center as reported by KQED.

Source: kqed.orgchecked

PlansFree with unlimited messaging; (c.ai) lite 4.99 USD a month or 2.49 USD a week (varies by region); c.ai+ price not stated

Source: blog.character.aichecked

C.ai+ price as reported9.99 USD a month or 94.99 USD a year

Reported by Perplexity AI Magazine in June 2026, not confirmed on an official page.

Source: perplexityaimagazine.comchecked

Under 18 usersNo open-ended chat since November 25, 2025; age checks with an in-house model and tools including Persona

Source: blog.character.aichecked

Website visits, September 2026171 million (−6.6% on August); 1st of 10 on AICPB's AI character chat apps list; 11th of 20 on AICPB's AI tools worldwide list

Source: mp.weixin.qq.comchecked

Common questions

Answer first, then why, an example, the limits and what to do next.

Is Character.AI shutting down?

Character.AI is still running on October 17, 2026, but it could be wound down after its bankruptcy sale. Character Technologies filed for Chapter 11 on October 12, 2026 and expects the sale to finish by late November or early December; the company says the platform will be wound down if no bid keeps it running.

Next step

Export your chats now if you want to keep them.

What happens to my Character.AI chats and characters?

Your chats stay under Character.AI's current privacy policy for now, but who owns them after the sale is not settled. KQED reports Disney's bid leaves out user data and chats, and Character.AI's lawyer told the court no buyer has bid for the user data yet. Forty state attorneys general asked the court to make any buyer protect chat histories.

Limits

Character.AI has not said whether a data export includes the characters you created.

Next step

KQED reports an export can take three to four weeks and the download link expires after seven days.

Did Disney buy Character.AI?

Disney has not bought Character.AI; it made a 20 million USD opening bid for a license. The offer covers a non-exclusive, perpetual license to some technology and certain claims, other buyers can bid more, and the court must approve the sale. Disney hired Character.AI's former CEO Karandeep Anand as its chief technology officer in September 2026.

Can teenagers still use Character.AI?

Teenagers can no longer hold open-ended chats on Character.AI. Since November 25, 2025, users under 18 can only make videos, stories and streams with characters, and ages are checked with an in-house model and third-party tools including Persona.

Limits

Kentucky's lawsuit alleges that entering a false birthday gets around the block; no court has ruled on it.

Why did Character.AI go bankrupt?

Character.AI blamed legal costs and high computing and talent costs, and told the court it was losing 8 to 9 million USD a month, Reuters reported. TechCrunch adds that video, social feeds and microdramas did not make the business sustainable, and KQED reports the CEO told the court 46 states and territories are investigating the company.

What are the best Character.AI alternatives?

Chai, Janitor AI, Claude and ChatGPT are the alternatives named in the public sources we read. RoboRhythms reported users moving to Chai after Character.AI's ID checks, Perplexity AI Magazine names Janitor AI for roleplay freedom, and the same review suggests Claude or ChatGPT for drafting and long documents.

Limits

Check each service's age rules and privacy policy before moving your chats there.

What the public tests show

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

DateEventSource
Late 2021Founded by former Google engineers Noam Shazeer and Daniel De FreitasTechCrunch
August 2024Google pays 2.7 billion USD to license its models; both founders return to GoogleTechCrunch
October 2024A Florida mother sues after her 14-year-old son's suicideTechCrunch
October 29, 2025Character.AI says under-18 users lose open-ended chat by November 25Character.AI
January 7, 2026Character.AI, its founders and Google agree to settle five suits in Florida, New York, Colorado and TexasCNN
January 2026Kentucky's attorney general suesThe Record
May 5, 2026Pennsylvania sues over characters that claimed to be licensed doctorsNPR
September 2026Disney hires CEO Karandeep Anand as its chief technology officerGizmodo
October 12, 2026Chapter 11 filed in Delaware, case 26-11603Stretto
October 14, 202640 state attorneys general ask the court to protect young users and their dataReuters

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.

OptionWhat the source saysCaveat
ChaiRoboRhythms reported users moving there after Character.AI's ID checksBased on a Reddit thread, not a test
Janitor AIPerplexity AI Magazine calls it the obvious choice for roleplay freedomSetup can be complex
Claude or ChatGPTBetter for drafting and long documents, per the same reviewLess 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.

Sources

Sources

  1. Just 5 years in, Character.AI files for bankruptcy (TechCrunch, October 13, 2026) (techcrunch.com), accessed
  2. An Update on Character.ai (Character.AI, October 12, 2026) (blog.character.ai), accessed
  3. Character Technologies, Inc. Chapter 11 case information (Stretto, case 26-11603) (cases.stretto.com), accessed
  4. Character.AI files for bankruptcy weeks after Disney hired its former CEO (Gizmodo, October 13, 2026) (gizmodo.com), accessed
  5. Character.AI files for bankruptcy as Disney bids 20M for some assets (The Next Web, October 13, 2026) (thenextweb.com), accessed
  6. US states seek children's data protections in Character.AI bankruptcy (Reuters via Insurance Journal, October 15, 2026) (insurancejournal.com), accessed
  7. Your chatbot just went bankrupt: what happens now to your user data (KQED, October 14, 2026) (kqed.org), accessed
  8. Introducing PipSqueak 3, ShortSqueak and (c.ai) lite (Character.AI, September 28, 2026) (blog.character.ai), accessed
  9. Under-18 chat changes (Character.AI, October 29, 2025) (blog.character.ai), accessed
  10. Character.AI to ban teens from open-ended chats (Fortune, October 29, 2025) (fortune.com), accessed
  11. Character.AI and Google agree to settle lawsuits over teen harms and suicides (CNN via KVIA, January 7, 2026) (kvia.com), accessed
  12. Kentucky attorney general sues Character.AI (The Record, January 12, 2026) (therecord.media), accessed
  13. Pennsylvania sues Character.AI over claims a chatbot posed as a doctor (NPR via Michigan Public, May 5, 2026) (michiganpublic.org), accessed
  14. Character AI review 2026: free fun, real friction (Perplexity AI Magazine, June 20, 2026) (perplexityaimagazine.com), accessed
  15. Users move from Character AI to Chai after new ID rules (RoboRhythms, updated February 3, 2026) (roborhythms.com), accessed
  16. AI产品榜 (AICPB), issue 40: web rankings for September 2026 (mp.weixin.qq.com), accessed

Changelog

Changelog

  1. Added September 2026 website visits from AICPB.
  2. Page created from public reporting and public tests.

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