"The Character.ai platform remains up and running," the statement added. Character.AI estimated both its assets and its liabilities at between $50 million and $100 million, TechCr

The filing also reveals that several of the states had been mid-investigation when Character.AI filed for bankruptcy. The states say they opened a probe into consumer protection and privacy concerns in 2024, following a lawsuit from the mother of a 14-year-old who died by suicide allegedly “seconds” after talking with the chatbot.

Attorney General Phil Weiser said that the coalition tried to address issues over potential child safety and privacy violations posed by Character AI's chatbots before the company filed for bankruptcy.

Chatbot platform Character.AI filed for bankruptcy late on Monday, saying it has agreed to sell some assets for $20 million to Walt Disney.

Character.AI filed for Chapter 11 bankruptcy protection on Monday and plans to complete a court-supervised sale of the company by the end of the year.

Artificial intelligence chat startup Character.ai— which has faced a wave of claims that its app contributed to mental health issues and suicides among teens — has filed for Chapter 11 bankruptcy.