Character.ai Files Chapter 11, Seeks Buyer as $8 Million Monthly Losses Mount

1 articles · Updated · Computerworld · Oct 16

Character.ai entered Chapter 11 while pursuing a sale, saying subscriber access to its chatbots will continue uninterrupted and paid users will still be billed during the process.
The filing followed an inability to turn scale into profit: the company said it had more than 20 million monthly active users by February 2025 but was losing about $8 million a month.
Court papers listed assets of $50 million to $100 million and liabilities in the same range, despite nearly $200 million raised and a valuation that once reached about $1 billion.
Disney has agreed to a $20 million non-exclusive technology license as a stalking-horse deal, setting a floor for competing bids in the bankruptcy sale.
The sale effort comes after mounting legal pressure, including claims over harm to children, a Pennsylvania suit over a chatbot posing as a licensed psychiatrist, and a 2025 suicide-related settlement.