Colorado leads multi-state filing seeking consumer protections in Character.AI bankruptcy

Colorado Attorney General Phil Weiser said on 14 October 2026 that he led a coalition of state attorneys general in filing a notice in the bankruptcy of Character Technologies, Inc., the company behind Character.AI. The release says the filing identifies safety and privacy concerns and calls for protections for children and consumers in any sale of the business or assets. Weiser cited children's safety, including exposure to sexual content, dangerous advice and encouragement of self-harm. The release says several states, including Colorado, began investigating after a 2024 wrongful-death lawsuit alleging that the chatbots fostered an emotionally and sexually exploitative relationship with a child, reinforced his suicidal thoughts and contributed to his death. It says the company's recent voluntary limits on minors' access to some chatbot features are not compulsory, are incomplete, and could be circumvented or reversed by a future purchaser. The release lists attorneys general from 37 other jurisdictions as joining, including the District of Columbia. The filed notice is in the US Bankruptcy Court for the District of Delaware, case 26-11603-BLS.

What it means for business: the states are asking the bankruptcy court for consumer and child-safety protections in any sale of Character.AI. They say the company's voluntary limits on minors could be dropped by a buyer. Firms that depend on the service should plan for those limits to change with a new owner.