--- title: "Forty attorneys general call for privacy protections from any buyer of Character.AI and its users' chats" description: "In Character.AI's Chapter 11 case, 39 states and the District of Columbia told the court they would press any buyer of the company or its data to adopt nine protections, including letting users delete their data before a sale." url: "https://sonomos.ai/newsroom/state-attorneys-general-character-ai-bankruptcy-chat-data/" type: NewsArticle publisher: "Sonomos Newsroom" published: "2026-10-17T03:03:00.000Z" updated: "2026-10-17T03:03:00.000Z" section: "Privacy" format: news tags: ["Bankruptcy", "Chat data", "State attorneys general", "Children's privacy"] word_count: 476 corrections: 0 json: "https://sonomos.ai/newsroom/state-attorneys-general-character-ai-bankruptcy-chat-data/index.json" sources: - title: "Notice of interest and reservation of rights by the coalition of state attorneys general regarding the debtor's outstanding regulatory, safety, and privacy issues (Case No. 26-11603-BLS)" publisher: "United States Bankruptcy Court for the District of Delaware (filing published by the Pennsylvania Office of Attorney General)" url: "https://cdn.attorneygeneral.gov/wp-content/uploads/CharacterAITechnologiesBankruptcy-Chapter11StatesNoticeToCourt2Filed-10-14-26.pdf" - title: "Privacy Tip #512: Coalition of 40 state AGs file notice in Character.AI bankruptcy case" publisher: "National Law Review" url: "https://natlawreview.com/article/privacy-tip-512-coalition-40-state-ags-file-notice-characterai-bankruptcy-case" - title: "AG Sunday takes action to ensure sensitive consumer information is protected in Character.AI bankruptcy, potential sale" publisher: "Pennsylvania Office of Attorney General" url: "https://attorneygeneral.gov/taking-action/ag-sunday-takes-action-to-ensure-sensitive-consumer-information-is-protected-in-character-ai-bankruptcy-potential-sale" --- # Forty attorneys general call for privacy protections from any buyer of Character.AI and its users' chats In Character.AI's Chapter 11 case, 39 states and the District of Columbia told the court they would press any buyer of the company or its data to adopt nine protections, including letting users delete their data before a sale. Published 2026-10-17 03:03 UTC · Privacy · News · 2 min read Sonomos Newsroom. URL: https://sonomos.ai/newsroom/state-attorneys-general-character-ai-bankruptcy-chat-data/ 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](https://cdn.attorneygeneral.gov/wp-content/uploads/CharacterAITechnologiesBankruptcy-Chapter11StatesNoticeToCourt2Filed-10-14-26.pdf), 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](https://natlawreview.com/article/privacy-tip-512-coalition-40-state-ags-file-notice-characterai-bankruptcy-case) 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](https://attorneygeneral.gov/taking-action/ag-sunday-takes-action-to-ensure-sensitive-consumer-information-is-protected-in-character-ai-bankruptcy-potential-sale) 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. ## Sources 1. [Notice of interest and reservation of rights by the coalition of state attorneys general regarding the debtor's outstanding regulatory, safety, and privacy issues (Case No. 26-11603-BLS)](https://cdn.attorneygeneral.gov/wp-content/uploads/CharacterAITechnologiesBankruptcy-Chapter11StatesNoticeToCourt2Filed-10-14-26.pdf), United States Bankruptcy Court for the District of Delaware (filing published by the Pennsylvania Office of Attorney General), published 2026-10-14, accessed 2026-10-17 2. [Privacy Tip #512: Coalition of 40 state AGs file notice in Character.AI bankruptcy case](https://natlawreview.com/article/privacy-tip-512-coalition-40-state-ags-file-notice-characterai-bankruptcy-case), National Law Review, published 2026-10-15, accessed 2026-10-17 3. [AG Sunday takes action to ensure sensitive consumer information is protected in Character.AI bankruptcy, potential sale](https://attorneygeneral.gov/taking-action/ag-sunday-takes-action-to-ensure-sensitive-consumer-information-is-protected-in-character-ai-bankruptcy-potential-sale), Pennsylvania Office of Attorney General, published 2026-10-15, accessed 2026-10-17 ## How this story was checked Automated source check, 2026-10-17 03:03 UTC. Each claim below was compared with the source it cites before publication. What that check does and does not cover: https://sonomos.ai/newsroom/standards/ - The notice was filed on 14 October 2026 in the District of Delaware bankruptcy court, Case No. 26-11603-BLS, by 39 states and the District of Columbia. (source 1: https://cdn.attorneygeneral.gov/wp-content/uploads/CharacterAITechnologiesBankruptcy-Chapter11StatesNoticeToCourt2Filed-10-14-26.pdf) - The notice says the company collects chat content, declared and inferred ages, and emotional and health-related disclosures, and uses the data to train its product. (source 1: https://cdn.attorneygeneral.gov/wp-content/uploads/CharacterAITechnologiesBankruptcy-Chapter11StatesNoticeToCourt2Filed-10-14-26.pdf) - The states list nine processes any purchaser should implement, including access and deletion before any sale of the data and limits on using chat content to train models. (source 1: https://cdn.attorneygeneral.gov/wp-content/uploads/CharacterAITechnologiesBankruptcy-Chapter11StatesNoticeToCourt2Filed-10-14-26.pdf) - The notice puts parties on notice of regulatory issues to be addressed in any sale or transfer of the company's business or assets. (source 2: https://natlawreview.com/article/privacy-tip-512-coalition-40-state-ags-file-notice-characterai-bankruptcy-case) Tags: Bankruptcy · Chat data · State attorneys general · Children's privacy ## About the publisher The Sonomos Newsroom is published by Sonomos, which makes Locke, desktop software that detects sensitive data on the user's device and masks it before a prompt reaches an AI service. https://sonomos.ai/locke/ General information about privacy, security and AI, not legal advice. Laws and guidance change; check the dates above and the sources cited before relying on anything here.