Character.ai filed Chapter 11 bankruptcy and set a December sale deadline

A chatbot platform many users built persistent characters on is now looking for a buyer in court. Character.ai said its board initiated a voluntary Chapter 11 process to supervise a sale, after what the company calls "a comprehensive review of our available alternatives." The company expects the sale to close "by the end of November or perhaps early December 2026," and the service stays online in the meantime, with paid subscriptions billed as before.

The company's own update is the only announcement so far. It names no buyer, no reserve price, no debtor-in-possession lender, and no court docket, and leaves the question of what happens if no bid comes in to a single sentence: "If no viable acquisition bid emerges, the platform will be wound down." The post tells users the account deletion flow and the data export flow are unchanged.

What the company is telling users right now

User data stays under the current privacy policy. Users keep the account deletion flow and the data export flow, and the company said neither is being paused during the sale. Paid subscriptions are honoured at the current price, and the company said it is not changing billing or trial terms. The only new behaviour the post describes is the court process itself: a judge supervises the sale, bidders file through the court, and the board picks the bid that it believes maximises value for the estate's creditors.

For a user who built a character or a long-running conversation on the service, the practical move the post implies is to run the export flow in the next few weeks and keep a local copy. That recommendation is not in the blog, but it follows from the one line the company included about a wind-down.

For a team that depends on Character.ai

A team building on top of Character.ai's platform or API, or routing user traffic to a character the team maintains there, has six to eight weeks to form a view on three questions. The first is whether to pre-emptively migrate off the platform now, which is cheaper than a forced migration later but costs the team the chance that a buyer continues the service unchanged. The second is which other provider matches the use case, which is a harder question for a team that was using Character.ai specifically for persistent character state than for one that was using it as a chat UI. The third is what to tell end users, who may read the news before the team does and ask whether their characters are still there in the morning.

A platform going into Chapter 11 is not the same event as a platform shutting down. The sale may well find a buyer who continues the service without visible change. But the only safe response for a team that depends on a service announcing this is to plan for the case the service's own post names as the fallback.

Source

An update on Character.AI, on the Character.AI blog.