Character.AI filed a voluntary Chapter 11 bankruptcy in Delaware on October 12 to sell itself under court supervision, and said the platform will be wound down if no buyer keeps it running. Disney is the opening bidder with $20 million for a non-exclusive, perpetual license to some of the company's intellectual property and certain legal claims, plus transition services; the sale is expected to close in late November or early December. The company estimated its assets and liabilities at $50 million to $100 million, and reported an operating loss of about $8-9 million per month while struggling to raise new capital amid lawsuits over user safety. It had earlier banned users under 18 from open-ended chats with its characters. The company also directed users with AI companions to mental health resources.
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