Is Character.AI Shutting Down? The Chapter 11 Filing Explained

Updated 14 October 2026. We will update this page as the court case moves.

The short answer

Character.AI is not shut down today. On 12 October 2026 the company behind it, Character Technologies, Inc., filed for Chapter 11 bankruptcy in Delaware to sell the business under court supervision. The company says the app and website keep running during the sale and subscriptions stay active.

What is not settled is what comes after. In its own words, Character.AI hopes the sale produces a bid that keeps the platform running, and "if such a bid is unavailable, however, the platform will be wound down." The company expects the sale to be complete by the end of November or perhaps early December 2026.

If you use Character.AI and care about your chats or characters, the one thing worth doing now is requesting a data export, because the help centre says it takes 3 to 4 weeks. The steps are further down.

What was filed, and where

Chapter 11 is the part of US bankruptcy law that lets a company keep operating while it reorganises or sells itself under a judge's supervision. It is not the same as closing down, and it does not by itself switch anything off. News reports citing the court filing put the company's estimated assets and liabilities each at $50 million to $100 million.

Character.AI's stated reason, from its own post: over the past year it tried to sustain the business "amid significant legal, regulatory, and operational headwinds," and after reviewing the alternatives its board decided a court-supervised sale of "all or substantially all" of its assets gave the best chance of maximising value. Press coverage connects those headwinds to lawsuits over the safety of younger users, some of which the company and Google settled earlier in 2026, and to suits brought by Kentucky and Pennsylvania.

What Disney is bidding for

Disney is not buying the Character.AI app, at least not under the bid on the table today.

According to the company's announcement as quoted in press coverage, Disney Worldwide Services, a Disney subsidiary, agreed to pay $20 million to be the "stalking-horse" bidder "for a non-exclusive perpetual license of certain Company intellectual property and certain Company claims." A stalking-horse bid is the first offer in a court auction: it sets a floor, and other buyers can top it.

Two details matter for users:

• A licence, not the platform. The bid as reported covers a non-exclusive licence to some intellectual property and claims. It does not say Disney will run the app or take over user accounts.
• Transition help. The filing, as quoted in press reports, says that former Character.AI employees who joined Disney will provide transition services that "will help the Company safely operate using its platform for a limited period of time and support its sale process."

The background: on 18 September 2026 Disney announced that Karandeep Anand, then Character.AI's chief executive, would join Disney as Chief Technology Officer from 2 October, and that "a number of Character.AI's technical team are expected to join Disney." Character.AI's statement on the filing was made by its current chief executive, Colin Adams, according to press reports.

What the company says happens to the app, chats and characters

Character.AI's post answers five questions. In summary:

• The app: "The Character.ai platform remains up and running, and you can continue to access all services at this time."
• Paid plans: subscriptions remain active and billing is unchanged for now. If paid features change, the company says it intends to tell subscribers in advance.
• Your data and chats: your information "continues to be protected under our Privacy Policy," and privacy and security practices are unchanged. The post reminds users that they can delete their account or export their data.
• The timeline: the sale is expected to be complete by the end of November or perhaps early December 2026.
• The outcome: the company hopes for a bid that allows continued operation; without one, the platform will be wound down.

One more fact worth knowing. Character.AI's Privacy Policy, effective 1 July 2026, has a "Business Transfers" clause: the company may disclose certain information "in connection with or during negotiations or closing of any merger, sale of company assets, financing, or acquisition." That clause is standard in tech privacy policies. It means a buyer could receive user data as part of a sale, under whatever terms the court approves.

The company has not published a shutdown date, and nothing on its blog or help centre says chats or characters will be deleted.

Timeline

What to do now if you use Character.AI

None of this calls for panic. The app is running, and the company has said it will give paid users notice before paid features change. But the outcome is open, and a data export takes weeks, so it makes sense to secure a copy now while everything still works.

1. Request a data export. Character.AI's help centre gives these steps.

On the web:

1. Go to your Profile.
2. Click Profile Settings.
3. Click Account.
4. Click Manage Account & Data.
5. Click Export Data. A pop-up confirms you will get an email with a download link.

In the mobile app:

1. Open your Profile.
2. Tap the Settings icon.
3. Tap Legal & Privacy.
4. Tap Export Data. A "Success" banner shows the request went through.

The help centre says an export "may take 3-4 weeks," arrives by email at the address on your account, and the link is valid for 7 days. Check that you can still read that inbox, and download the file as soon as it arrives. The help pages answer "How can I export my chats?" with this same export, but they do not list exactly what the file contains.

2. Copy your own characters by hand. If you made characters, open each one's edit page and paste its name, tagline, description, greeting and definition into a text file. These are the parts you would need to rebuild a character anywhere else. Our step-by-step guide to moving a character from Character.AI shows how to rewrite those fields for another app, with a filled example in SecretCrush AI's builder.

3. Save the chats you care about most. If there are a few conversations you would hate to lose, copy the key passages or take screenshots now, rather than relying only on an export you have not seen yet.

4. Leave your subscription alone unless you want to stop using the app. The company says billing is unchanged and that it will notify subscribers in advance of changes. Nothing it has published asks paid users to act.

If you want to try somewhere else

Many people will simply keep using Character.AI until the sale settles, and that is a reasonable choice. If you would rather have a backup ready now, start with SecretCrush AI.

SecretCrush AI: rebuild your character, for adults

Disclosure: SecretCrush AI publishes this blog. SecretCrush AI is an 18+ AI companion site built for immersive, realistic roleplay: characters that stay in the scene, remember what matters and answer like people rather than chatbots. If you are moving a character, this is what you get:

• Adult roleplay for 18+. Character.AI's help centre says adult content is against its terms and "will not be supported at any point in the future." On SecretCrush AI, adult roleplay is switched on per chat, after an 18+ confirmation.
• A free character builder to rebuild your character. The character builder takes a name, a look, personality picks, a scenario and a first message of up to 512 characters each, which is most of what a Character.AI character is. The character photo costs 6 coins, and a new account's 20 welcome coins cover it.
• 10 free messages a day, every day. No card is needed to create a free account.
• Premium when you want the full experience. Unlimited messages with advanced memory, premium models, 500 bonus coins every month (600 on yearly), AI images and videos of your character right in the chat, and full content privacy. It costs $16.99 a month, $12.99 a month billed quarterly, or $8.99 a month on the yearly plan; see the pricing page.

There is no importer, so you paste your character's text in by hand. Our guide to moving a character from Character.AI walks through every field with a filled example.

Other options

If you want to compare before you choose, our list of Character.AI alternatives for adults covers what each app allows and charges.

How we checked

On 14 October 2026 we read Character.AI's own announcement and help-centre pages, the court record of the filing and press coverage of the Disney bid. We will update this page as the case moves.