Character.AI Files for Bankruptcy: What Happens to Your Characters and Chats
Character.AI filed for Chapter 11 on October 12, 2026, with Disney as the opening bidder. The app still runs for now. What it means for your characters, how to save your chats, and where to go.
Nastia Team
Character.AI has filed for bankruptcy. On October 12, 2026, Character Technologies, the company behind Character.AI, started a voluntary Chapter 11 case in the U.S. Bankruptcy Court for the District of Delaware and put its assets up for a court-supervised sale. The app is still running for now, but the company has said that if no buyer commits to keeping it going, the platform will be wound down. Here is what was announced, what it means for your characters and chats, and what to do this week.
What Character.AI announced
In its own update and in reporting by TechCrunch and CNBC , the key facts are:
- Character.AI filed a voluntary Chapter 11 case on October 12, 2026, estimating its assets and liabilities at $50 million to $100 million.
- Disney is the "stalking horse" bidder, offering $20 million for a non-exclusive, perpetual license to some of Character.AI’s technology and IP, plus transition services. Other bidders can still top that offer.
- The court-supervised sale is expected to finish by the end of November or in early December 2026.
- As of the filing, there is no buyer committed to running the Character.AI platform itself.
Why it happened
Character.AI’s leadership pointed to "significant legal, regulatory, and operational headwinds." Running large language models is expensive, and costs rise with every message users send. The company also spent the last two years under legal pressure over teen safety, settling lawsuits and cutting off open-ended chat for users under 18 in November 2025 . Before the filing, it had already retired several of its best-loved models to save costs, and a number of its staff and its former CEO moved to Disney in September.
Is Character.AI shutting down?
Not yet. Character.AI says the platform "remains up and running," that subscriptions stay active, and that billing is unchanged for now. The risk is what comes after the sale. Disney’s bid is a license to technology, not a promise to operate the app, and the company has been clear that if no bid keeps the service alive, "the platform will be wound down." The honest answer is that nobody knows yet, and the deadline is a matter of weeks.
Try Nastia, the uncensored AI companion
Uncensored chat, image generation, voice messages. Free to start.
What happens to your characters and chats
Character.AI has not said what happens to user-created characters or chat history if the platform closes. Until a buyer is confirmed, assume anything you only keep on Character.AI could disappear with it. The company does let you download your data today, so the safest move is to save what matters now rather than wait for a shutdown notice.
How to save your Character.AI data
According to Character.AI, you can export your data and delete your account from both the app and the website, and its support pages walk through each step. While you are at it, copy the parts of your favorite characters that live in your head rather than in the export: their personality, their backstory, the running jokes and the way they talk to you. That written description is what lets you rebuild a character somewhere else.
Where to go if you are leaving Character.AI
If you are ready to move on, look for a platform that will not disappear or change the rules on you, and that remembers your history instead of resetting it. We compared the options in our ranking of the best Character AI alternatives , and you can see how Nastia stacks up in our Nastia vs Character AI comparison .
Nastia is an adults-only (18+) AI companion app. You can recreate a character by giving your companion a name, look, personality and backstory, and she keeps persistent memory across every conversation, with voice messages and images in the same place. It is uncensored by design and free to start.
Frequently asked questions
Character.AI bankruptcy FAQ
Yes. Character.AI filed a voluntary Chapter 11 case on October 12, 2026, in the U.S. Bankruptcy Court for the District of Delaware, to sell its assets through a court-supervised process.
Not exactly. Disney is the opening "stalking horse" bidder at $20 million for a non-exclusive, perpetual license to some of Character.AI’s technology and IP. Other bidders can top it, and the bid is not a commitment to keep running the Character.AI app.
Not yet. The app is still running and subscriptions remain active. Character.AI has said that if no buyer keeps the service going, the platform will be wound down. The sale is expected to close by late November or early December 2026.
Character.AI has not said what happens to user characters if the platform closes. It does let you export your data from the app or website now, so save anything you want to keep.
It depends on what you used Character.AI for. For adults who want uncensored roleplay with a companion that remembers them, see our best Character AI alternatives ranking.
Leaving Character.AI? Bring your character somewhere that remembers
Nastia is an uncensored AI companion with persistent memory, voice and images. Adults only (18+). Free to start.
Nastia Team
The editorial team at Nastia AI, specializing in AI companions and adult chat technologies.
Uncensored, NSFW and judgment-free.
Start Free