According to Decrypt, the chatbot application formerly valued at approximately one billion dollars has filed for bankruptcy protection in Delaware and is currently listed as up for sale. The filing occurred two weeks after Character AI launched new models for its platform. If no purchase offer is accepted, the company plans to shut down operations.
The Delaware bankruptcy filing indicates that Character AI is seeking relief under U.S. bankruptcy procedures while simultaneously pursuing a sale of the business or its assets. Disney has expressed interest in acquiring the company and has placed a bid estimated at up to $20 million. No further details have been provided regarding terms, timeline, or conditions of the bid.
Following the filing and amid ongoing service use by users, Character AI announced that it will provide grief support resources to affected users. The resources aim to assist users coping with potential disruption to access or changes in service availability should the company proceed with shutdown if no buyer is secured.
