POLICY · REGULATION · #1992
40 state attorneys general file notice in Character.AI bankruptcy seeking data protections
New York AG Letitia James and 39 other bipartisan state attorneys general filed a notice of interest in Character.AI’s Chapter 11 case, urging the court to require safeguards for sensitive user chats as the company pursues a reported asset sale to Disney. The filing says several states had been investigating consumer-protection and privacy concerns — including risks to minors and an alleged suicide-linked chat — when Character.AI filed for bankruptcy.
KEY POINTS
- New York AG Letitia James and 39 other bipartisan state attorneys general filed a notice of interest in Character.AI’s Chapter 11 case, urging the court to require safeguards for sensitive user chats as the company pursues a reported asset sale to Disney.
- The filing says several states had been investigating consumer-protection and privacy concerns — including risks to minors and an alleged suicide-linked chat — when Character.AI filed for bankruptcy.
- Because Character.AI collected highly sensitive conversations (including from many minors), a sale of its assets could transfer that data, so attorneys general want enforceable safeguards to protect users and comply with state privacy and consumer-protection laws.
WHY IT MATTERS
Because Character.AI collected highly sensitive conversations (including from many minors), a sale of its assets could transfer that data, so attorneys general want enforceable safeguards to protect users and comply with state privacy and consumer-protection laws.