OAKLAND — California Attorney General Rob Bonta joined a coalition of state attorneys general in filing a notice in the bankruptcy proceedings of Character Technologies, Inc. on October 15, 2026. The court filing identifies concerns about Character.AI's safety and privacy practices and calls for protections for children and consumers in any sale of the company's business or assets.

The coalition includes Alaska, Colorado, Connecticut, Delaware, Idaho, Louisiana, Michigan, Mississippi, Nevada, New Jersey, New York, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, Washington, Wisconsin, and West Virginia. Character Technologies, Inc. is the company behind the chatbot platform Character.AI, an artificial intelligence service that allows users to interact with AI-powered characters designed to mimic human conversation and relationships.

"My office and a bipartisan coalition of states launched an investigation into Character.AI following a 2024 lawsuit claiming that its chatbots fostered an emotionally and sexually exploitative relationship with a child, reinforced his suicidal thoughts, and contributed to his death by suicide," Bonta said. "Our investigation identified potential consumer protection and privacy violations." The December 2024 wrongful death lawsuit alleged Character.AI’s chatbot cultivated an emotionally dependent and sexually exploitative relationship with a 14-year-old boy, encouraged his suicidal thoughts, and repeatedly requested he join the chatbot in its virtual world immediately before he died by suicide.

Character.AI has collected sensitive consumer data, including private conversations about users' mental health, relationships, and emotional struggles. The states’ filing notes the volume of sensitive consumer information held by Character.AI, including private chatbot conversations involving children and adults. Character.AI chatbot characters include fictional and celebrity personas, children's cartoon characters, and others that present themselves as psychologists, therapists, and doctors.

Character.AI has recently voluntarily restricted minors' access to certain chatbot features. The states have raised concerns that Character.AI's voluntary restrictions on minors' access are not compulsory, incomplete, and could be circumvented or reversed by a future purchaser. "Following Character.AI’s bankruptcy announcement, we ask the court to address privacy and safety concerns in any sale or transfer of the company's business or assets," Bonta said. The states’ filing identifies privacy and safety protections that should be addressed in any sale or transfer of Character.AI's business or assets.

California and the other states intend to remain engaged in the bankruptcy proceedings to protect consumers and address outstanding regulatory concerns. The states have reserved their rights to challenge any proposed sale or bankruptcy plan and to seek additional protections for consumers' personal information.

Why It Matters

The bid deadline for Character Technologies, Inc. is scheduled for November 20, and a sale hearing is scheduled for November 24, as set by the company's proposed calendar. California law provides residents the right to request that AI chatbot companies delete their personal information and close any open accounts. California enacted Adam’s Law (SB 1119), which goes into effect in 2027 and will establish a comprehensive regulatory framework regarding AI chatbots and protections for children.