Character.ai files for bankruptcy and puts itself up for sale

Character.ai will shut down if no buyer emerges, capping a fall from $2.7 billion Google deal to bankruptcy

Character.ai has filed for bankruptcy and is up for sale, with a deal expected to close in early December 2026. If no buyer steps in, the service will shut down. The platform and subscriptions keep running until then. The company blames lawsuits over harm to children, regulatory pressure and operational problems.

Why it matters: Character.ai is bankrupt and looking for a buyer, so users face a shutdown if nobody takes over.