Forty attorneys general call for privacy protections from any buyer of Character.AI and its users' chats

A coalition of 39 state attorneys general and the District of Columbia has told the bankruptcy court handling Character.AI's Chapter 11 case that it would press whoever buys the company, its product or its users' data to adopt a list of privacy and safety protections, including giving every user the chance to delete their data before it is sold. The filing sets out the states' position; it does not impose terms on a sale.

The states' notice, filed on 14 October in the District of Delaware, is a notice of interest and reservation of rights in the case of Character Technologies, Inc., No. 26-11603-BLS. It does not ask the court for a ruling yet. As a Robinson & Cole summary in the National Law Review puts it, the filing puts all parties on notice of the regulatory issues that will need to be addressed in any sale or transfer of the company's business or assets.

What the states say the company holds

According to the notice, Character.AI collects, stores and analyses chat content, declared and inferred ages, emotional and health-related disclosures, and usage patterns, and uses that data for analytics, personalisation, age assurance, monetisation and training its product. Citing the company's own records, the notice says more than 21.6 million US accounts had been created by March 2025, including more than 2.1 million with a declared age under 18.

The states argue that historical chats are likely to contain children's sensitive information and may be hard to separate from the rest of the record, and that transferring them to train other models risks carrying harmful outputs forward. They also say the company's restriction on open-ended chat for users under 18 is voluntary and could be rolled back by a purchaser.

The nine protections

The notice lists processes the states say they "would advocate" any purchaser be prepared to implement: age assurance that does not rely only on self-declared birthdates; continued protections for minors; removal of characters presented as therapists, doctors, lawyers or other licensed professionals; crisis safeguards that cannot be bypassed with a click; a privacy program with consent before processing sensitive data such as health information disclosed in chats; working advertising opt-outs; limits on using chat content to train models or for other purposes beyond what users and parents consented to; access and deletion rights, including deletion before any sale; and truthful marketing.

Why it matters

The filing treats a chatbot's conversation logs as a regulated asset rather than ordinary company property in a sale. The Pennsylvania attorney general's announcement describes those logs as including private conversations about users' mental health, relationships and emotional struggles.

Each state reserves the right to object to any proposed sale or plan. Whether any of these protections end up in a sale will depend on what is proposed and on objections still to come.