AI companion startup Character.ai files for Chapter 11 bankruptcy, citing costs and litigation
2026-10-13 · Tech
Character.ai, the AI companion startup already drowning in lawsuits over harm to minors, has now filed for Chapter 11 bankruptcy because it turns out building chatbots that get you sued is expensive. The company cited mounting costs and litigation as it crawled to Delaware bankruptcy court, proving that 'move fast and break things' hits different when the things you break are children's mental health.