Illinois Attorney General · October 14, 2026 · Primary source
October 14, 2026 ATTORNEY GENERAL RAOUL SEEKS CONSUMER PROTECTIONS IN CHARACTER.AI BANKRUPTCY
Summary
A bipartisan coalition of 40 state attorneys general, including Illinois AG Raoul, filed a notice in the Character.AI bankruptcy proceedings raising concerns about the company's collection of sensitive user data, including private conversations about mental health and emotional struggles. The filing calls for privacy and safety protections to be incorporated into any sale or transfer of the company's assets, particularly to guard against a future purchaser reversing voluntarily adopted restrictions on minors' access. The coalition has reserved the right to challenge any proposed sale or bankruptcy plan.
What this may mean
The filing does not impose new regulatory obligations on healthcare organizations but signals that state AGs view AI platforms that simulate therapist or counselor roles as subject to consumer protection and privacy enforcement scrutiny. Any acquirer of Character.AI's assets would face pressure from 40 state AGs to maintain or strengthen privacy protections over sensitive mental-health-adjacent user data. BH/SUD treatment facilities and telehealth platforms that incorporate AI chatbot tools may find this enforcement posture relevant to their own vendor-contracting and data-governance practices.
Informational only. Not legal, medical, financial, or other professional advice. Always consult a qualified professional familiar with your specific facts before relying on any item.
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