Character.ai Files For Bankruptcy, Citing Costs and Litigation

Character.ai has filed for Chapter 11 bankruptcy, citing significant legal, regulatory, and operational headwinds. The startup, once valued at $1 billion, is now up for sale in a Delaware court. Disney has emerged as the initial bidder with a $20 million offer. If no buyer is secured, the platform will shut down. Following the announcement, the company is providing grief resources to its users as it navigates these bankruptcy proceedings and potential acquisition.