40 US attorneys general call for data protection in the sale of Character.AI
40 US attorneys general joined the bankruptcy proceedings of Character.AI with a joint filing. They are calling for user data to be protected during the asset sale. Continued operation of the platform depends on finding a suitable bid.
A bipartisan group of 40 US attorneys general filed a notice in the bankruptcy proceedings of Character.AI. The notice highlights regulatory issues that they say must be resolved when the company and its assets are sold or transferred, particularly the protection of user data. New York Attorney General Letitia James also disclosed the existence of a multistate investigation spanning several years; the source does not describe its findings.
Character.AI filed for Chapter 11 bankruptcy protection in the US, which the company says is intended to facilitate the sale of the company and its assets. In a court filing, it listed assets and liabilities, each in the range of 50–100 million dollars. It also agreed to sell some assets to Disney for 20 million dollars; the agreement includes a non-exclusive perpetual license to the technology.
According to management, the platform is expected to remain operational during the sale process. The company expects the process to be completed in late November or early December. However, management says no bid that would allow the platform to continue operating has yet been received; if none emerges, the company will shut down the service. The sale of some assets to Disney therefore does not, in itself, ensure that the platform will continue operating.
Why it matters
The bankruptcy sale will affect the availability of the service for users and the terms of any transfer of their data. The joint filing alerts potential asset buyers that they will also need to address consumer data protection when taking over the assets.
What was added since the original report
Verified updates
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A bipartisan group of 40 US attorneys general filed a notice in the bankruptcy proceedings.; The attorneys general are calling for consumer data protection to be addressed during the sale or transfer of assets of Character.AI.; Letitia James disclosed a multistate investigation into Character.AI spanning several years.
- A bipartisan group of 40 US attorneys general filed a notice in the bankruptcy proceedings.
- The attorneys general are calling for consumer data protection to be addressed during the sale or transfer of assets of Character.AI.
- Letitia James disclosed a multistate investigation into Character.AI spanning several years.
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The company lists assets of 50–100 million dollars in a court filing.; The company lists liabilities of 50–100 million dollars in a court filing.; The agreed price for the assets being sold to Disney is 20 million dollars.; The agreement with Disney includes a non-exclusive perpetual license to the technology.; According to management, the platform will be shut down if no bid is received that would allow it to continue operating.
- The company lists assets of 50–100 million dollars in a court filing.
- The company lists liabilities of 50–100 million dollars in a court filing.
- The agreed price for the assets being sold to Disney is 20 million dollars.
- The agreement with Disney includes a non-exclusive perpetual license to the technology.
- According to management, the platform will be shut down if no bid is received that would allow it to continue operating.
Two audiences, two different impacts
What this means
For individuals
According to management, users of the Character.AI platform can continue using the service during the sale, but its long-term availability is not assured.
For a business
For potential asset buyers, protecting user data is a regulatory issue that, according to the filing by the attorneys general, must be addressed in any sale or transfer of assets.
Risks and complianceCheck the original
Event sources
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