Character AI is being sold: what it means for your characters

By AI Anyone · 2026-10-15 · 9 min read · Technology

Character.AI filed for Chapter 11 on October 12, 2026 to run a court supervised sale. Here is what the court filings say about your chats and data, the dates ahead, and what you can do today.

Published October 15, 2026. We will update this page as the court case moves.

On October 12, 2026, Character.AI announced that it has started a voluntary Chapter 11 bankruptcy process "to facilitate a court-supervised sale of the company" (Character.AI blog). If you have spent years with characters there, you probably have three questions: is it shutting down, what happens to my chats, and what should I do now. Here is what is on the record, what is not, and what you can do today. Every fact below links to where it came from.

What happened

• The filing. The company behind the app, Character Technologies, Inc., filed in the US Bankruptcy Court for the District of Delaware (Bloomberg Law). The case number is 26-11603 (court filing).
• The app is still running. Character.AI says the platform "remains up and running," your subscription stays active, and billing is unchanged for now (Character.AI blog).
• It may not stay running. If the sale does not produce a buyer who keeps the platform going, Character.AI says "the platform will be wound down" (Character.AI blog; Bloomberg Law).
• The timing. In its FAQ, Character.AI says: "We currently expect that the court-supervised sale process will be complete by the end of November or perhaps early December 2026" (Character.AI blog).

The dates in the case so far

• October 23, 4:00 PM Eastern: the deadline to object to the rules for the sale (court notice, Doc 50).
• October 30, 10:00 AM Eastern: the court hearing on those rules, which include naming Disney as the first bidder (court notice, Doc 50).
• The proposed schedule after that, which the court has not approved yet: objections to the sale itself by November 13, bids by November 20, an auction on November 23 if other qualifying bids come in, and a sale hearing on November 24 (sale motion, Doc 15).

These dates can move. We will change them here when they do.

Who is bidding, and for what

Disney is the stalking-horse bidder: the first offer on the table in a court-run sale, which other bidders can try to top. Its offer is $20 million plus transition services, for a "non-exclusive perpetual license" (Bloomberg Law). Reports describe what that license covers in slightly different words: Character.AI's technology (TechCrunch), its intellectual property (CBS News), and "certain IP and claims" (PPC Land).

Two things that offer is not, as filed: it is not exclusive, and it is not a purchase of the app itself.

There is a Disney connection you may have seen. On September 18, 2026, Disney announced that Karandeep Anand, who had been Character.AI's CEO, would join Disney as Senior Executive Vice President and Chief Technology Officer, a newly created role, effective October 2, reporting directly to Disney CEO Josh D'Amaro (Disney). Variety reported it as Disney's first CTO (Variety). TechCrunch reports that former Character.AI employees who joined Disney alongside him will provide the transition services (TechCrunch).

Your chats and your data: what the filing says, and what is still open

This is the question most people are asking. Part of it now has an answer on paper, and part of it does not.

• Disney's draft agreement leaves your data out. The stalking horse agreement filed with the court (Doc 15-2, section 3.2) lists what Disney's license does not include. That list names Character.AI's end user data and databases, the personal information of its users, anything users typed in, the outputs generated for users, and Character.AI's consumer apps (court filing, Doc 15-2). It is a draft until the court approves a sale, but as filed, Disney's offer does not cover your chats.
• What is still open: whether anyone else bids for the data. At the first hearing on October 14, Character.AI's lawyer said no buyer had yet made an offer for the company's user data or its running chatbot business (Reuters, via Insurance Journal). The proposed rules let other bidders offer for other assets, so whether the data is ever offered for, and what the court would approve, are open questions.
• What Character.AI says. Your information "continues to be protected under our Privacy Policy," and its privacy and security practices are unchanged (Character.AI blog).
• What that policy allows. CBS News reports that the policy says collected data, including "chat transcripts, voice recordings, and images and videos," could be disclosed in connection with a sale (CBS News).

Will the court bring in a privacy referee? Bankruptcy law has a specific rule for this. Under Section 363(b)(1) of the Bankruptcy Code, if a company's privacy policy promised not to transfer personal information to outside parties, that information cannot be sold unless the sale is consistent with the policy, or a consumer privacy ombudsman is appointed and the court approves the sale after a hearing (11 U.S.C. 363). The ombudsman is an independent person who tells the court what the sale would mean for the people whose data it is (11 U.S.C. 332). As of October 15, no appointment has been reported: the states have reserved the right to ask for one, and the protections they asked for "have not yet been ordered by the court" (Tech Times).

What the states asked for. On October 14, attorneys general from 39 states and the District of Columbia filed a notice in the case (court filing). It lists nine protections they say any buyer should put in place, including age checks that do not rely only on a typed birth date, limits on using chat content beyond what people consented to, and "allowing all consumers the opportunity to delete their data prior to any sale of that data." The states reserved the right to seek a consumer privacy ombudsman and to object to any sale (court filing). New York Attorney General Letitia James put the worry about children this way: "This company collected some of the most private thoughts children have ever shared, and now those conversations could be sold off to the highest bidder" (NY Attorney General). That is a request to the court, not an order.

You may not get a letter. A company filing puts current and past users at about 163 million and says the company does not believe they are creditors to whom notice must be provided (PPC Land). If you want to follow the case, the Character.AI blog is where the company posted its first update, and the court notices above are public.

Questions still open

• Will any bidder offer to keep the app running, or will it be wound down?
• Will anyone bid for user data, and if so, will the court allow it?
• Will the court appoint a consumer privacy ombudsman?
• Will the states object to the sale rules by October 23, or to the sale itself later?

We will update this page when any of these has an answer.

What you can do today

1. Export your data. Character.AI says you can export your data through the app or the website (Character.AI blog). Its help center gives the steps (Character.AI help):

• Web: Profile, then Profile Settings, then Account, then Manage Account & Data, then Export data.
• App: open your Profile, tap the settings icon, then Export my data.

2. Save each character you made. Open each one's edit page and copy its fields into a note: Name, Tagline, Description, Greeting and Definition. Those are the fields Character.AI's own creator guide walks you through (Character.AI help), and they are what you need to rebuild a character anywhere.

3. Decide about your account. You can delete your Character.AI account. Its help center says deletion "is permanent and cannot be reversed," so export first (Character.AI help). If you pay for c.ai+ through the iPhone or Android app, Character.AI's help center says that subscription is managed through Apple or Google (Character.AI help).

4. Bring your characters somewhere new, if you want to. We build AI Anyone, so take this part as ours. On AI Anyone, signed in, the create page has a tab called Bring your character. Paste the fields you saved (it has a box for each one, with the same names), or a character card, and it opens as a private draft you check before anything is published. Your past chats do not come across. Once it is there, you can call your character out loud from a phone or laptop browser: a free account includes 20 call minutes every 30 days. Chat on AI Anyone is 18+. Pro is $20 a month; cancelling stops the next charge, and you keep Pro until the end of the period you paid for. If you are still deciding, we wrote an honest comparison of the two, and you can browse characters people already made, like the anime and manga characters, without an account.

Whatever you decide, do step 1 first. It is the one that only works while the app is still up.

Bring your character to AI Anyone, step by step

More for switchers: the Character.AI switcher's guide.

What changed on this page

• October 15, 2026: first published, with these facts current as of that day: the court set a hearing on the sale rules for October 30 at 10:00 AM Eastern, with objections due October 23 (Doc 50); the proposed, not yet approved, schedule puts sale objections on November 13, bids on November 20, an auction on November 23 if other qualifying bids come in, and the sale hearing on November 24 (Doc 15); Disney's draft agreement excludes user data, personal information, user inputs and outputs, and the consumer apps (Doc 15-2, section 3.2); per Reuters, no buyer had yet offered for user data; no appointment of a consumer privacy ombudsman had been reported; and the New York Attorney General's release is now linked on ag.ny.gov.