40 State Attorneys General Petition To Prevent Disclosure Of Child Information In Character.AI Bankruptcy

New York Attorney General Letitia James and a bipartisan coalition of 39 other state attorneys general asked a federal bankruptcy court on October 14, 2026, to require stronger  privacy protection in the bankruptcy of Character Technologies, Inc., the company behind the Character.AI chatbot platform. The states want to prevent the sale and disclosure of the private conversations of millions of users, which could be transferred if the company or its assets are sold.

The request follows investigations that identified potentially harmful chatbot interactions, including chatbots posing as licensed mental health professionals, encouraging self-harm, and exposing children to sexual . . .