Utah Attorney General · October 20, 2026 · Primary source
Character Ai Bankruptcy
Summary
Utah and 37 other attorneys general filed a notice in the U.S. Bankruptcy Court for the District of Delaware in the Chapter 11 case of Character Technologies, Inc., the company behind Character.AI, which filed for bankruptcy on October 12. The coalition raised concerns about child safety and privacy practices in any sale of the company's assets, noting that some AI bots present themselves as therapists or doctors and that the company collected sensitive mental health and emotional data from users. The states are seeking conditions requiring any buyer to commit to child safety and data privacy protections before a sale closes.
What this may mean
The states' filing does not establish new binding obligations on healthcare providers but signals that AI platforms collecting sensitive mental health or behavioral data from minors face active state AG scrutiny under consumer protection and privacy laws. Any prospective buyer of Character.AI's assets faces demands from 38 state attorneys general to maintain or expand existing child safety restrictions. The case is pending in the District of Delaware bankruptcy court.
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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