Is Character.AI Shutting Down?
Character.AI filed for Chapter 11 on October 12, 2026 and is still running. What the sale means for subscriptions, refunds, your characters and chats.
Edited by Troy · Published
Not today. Character.AI is still running, and subscriptions and billing are unchanged for now. But on October 12, 2026 it filed for voluntary Chapter 11 to sell the company in a court-supervised process, and it says the platform will be wound down if no bid keeps it operating. It expects the sale to close by late November or early December 2026.
Character.AI is still running
Character.AI says its platform remains up and users can access all services at this time. News coverage of the filing reports that the company expects to keep the platform running through the sale with minimal disruptions. The same coverage reports that the Disney deal keeps the platform operational at least during the bankruptcy, with Disney providing transition services through former Character.AI employees it hired. The company's press release says those services cover a limited period of time.
What Chapter 11 means here
Chapter 11 here is a sale process. Character.AI started a voluntary Chapter 11 case to run a court-supervised sale of all or substantially all of its assets. The company says it filed after taking steps to sustain the business amid significant legal, regulatory and operational headwinds. It hopes a buyer's proposal lets the platform keep operating, and if no such bid comes, the platform will be wound down. It has also filed first-day motions. Once the court approves them, they would let it keep paying employees, honor commitments to platform users and pay post-filing vendor obligations.
News coverage of the filings reports that high costs, plus potential litigation-related liabilities and regulatory engagement, left the company unable to generate enough cash flow to support the business in its present form. The filings also say AI entertainment has proven costly to develop and grow. The same coverage puts losses at $8 million a month and estimates assets and liabilities each at between $50 million and $100 million. Google is the largest creditor on the docket, owed more than $4 million.
The lawsuits and the Disney bid
News coverage reports that families filed lawsuits accusing the platform of harms, and that Character.AI agreed earlier this year to settle five cases, including Megan Garcia's. Kentucky sued the company in January. Pennsylvania sued in May, alleging its chatbot falsely presented itself as a licensed medical professional. Character.AI has blocked users under 18 from back-and-forth conversations with bots, so they can only create one-time stories or videos. Separately, Disney sent a cease-and-desist letter in September last year alleging use of its copyrighted characters, and Character.AI removed Disney's characters afterward.
Disney is now the stalking horse bidder. The press release says the bid is $20 million plus transition services for a non-exclusive perpetual license of certain company intellectual property and certain company claims. It is subject to higher or better offers under section 363 of the Bankruptcy Code. News coverage reports that other companies can bid against it and there is no guarantee Disney wins, though as stalking horse it has the right to match a deal.
Some users in fan forums say they are not surprised. They point to age verification, DMCA character deletions, filters and the Pipsqueak chat style.
Timeline
- October 12, 2026: Chapter 11 petition filed in the United States Bankruptcy Court for the District of Delaware.
- October 15, 2026: Character.AI filed the Notice of Commencement of its case, including information about the section 341 meeting of creditors.
- Late November or early December 2026: under the proposed bidding procedures, the company expects the sale and the closing of any resulting transactions.
- If no purchase continues the platform: Character.AI will be wound down.
Free users
Nothing changes for free accounts at this time, because the company says all services remain accessible. Without a subscription there is nothing to cancel. The one decision is whether to export your data before the sale closes.
Paid subscribers: billing, refunds, cancelling
The company says paid subscriptions remain active and billing is unchanged for now. At this review, c.ai+ costs $9.99 a month or $94.99 a year in USD.
The terms say you can cancel at any time through account settings, the App Store, Google Play or the web account page. Cancellation takes effect at the end of the current billing period, and no partial refunds are issued for unused time. Where you cancel depends on how you pay:
- iOS subscriptions bill through your Apple ID (Settings > Apple ID > Subscriptions).
- Web subscriptions bill through Stripe and are managed on the Character.AI website.
- App Store and Google Play subscribers must cancel and request any refund through Apple or Google.
If an annual renewal is coming up, weigh $94.99 for a year against a sale expected to close by early December, with no partial refund under the terms.
Your characters and chat history
Character.AI's Privacy Policy, effective July 1, 2026, lists chat communications, posted images or videos, biography description and shared Characters among the content it collects. The company says you can export your data or delete your account through the app or the website. Users in fan forums urge others not to panic and to save chats and export data in case the app shuts down. One user asks whether the in-app export works and says they screenshotted their personas and bots as a backup.
What a buyer could change, including your data
Character.AI says user information continues to be protected under its Privacy Policy and that its data privacy and security practices are unchanged. If the service changes in a way that affects paid features, it intends to notify subscribers in advance. Users in fan forums worry about whether Disney could use their OCs and chat logs. For anyone who shares that worry, the company offers two tools: export and account deletion.
What to do now
- Request your export today. On the web, go to Profile > Profile Settings > Account > Manage Account & Data > Export Data. In the mobile app, go to Profile > Settings icon > Legal & Privacy > Export Data. The help page says processing can take 3-4 weeks, so a mid-October request should arrive by mid-November, before the expected close. Our guide on how to export Character.AI chats covers what the file contains and what to do if the email never arrives.
- Watch your inbox. The download link is emailed and stays valid for 7 days from when the email is sent.
- Decide on your subscription. Cancelling stops renewal at the end of the current billing period and gives no partial refund, at this review.
- Delete only after you have downloaded the export. Account deletion is permanent and cannot be reversed.
Where to go if Character.AI shuts down
Start looking now, while your old chats are still there to compare against. Pick by what kept you on Character.AI. Everything below comes from our reviews, with prices as of each review, and our ranked list of Character.AI alternatives compares them side by side.
If you came for the stories
Frontier is the closest fit if what you miss is a story that goes somewhere. People write every story, and the characters remember what you did: authors mark which story moments count, and characters carry those events into chat, letters and sequels. It runs on iOS, Android and the web, is rated 18+ with mature themes allowed, and is free to start. Quill refill plans cost $12.99 to $39.99 a month on iOS.
If you came for long-term memory
Nomi is built around one companion who remembers you, with short, medium and long-term memory and a Mind Map that shows how memories connect. The free plan allows 50 messages a day. Replika saves facts about your people, plans and interests to a Memory screen you can read and delete.
If you came for community bots
Janitor AI is the free option with a huge library of community bots, for adults. The free tier gives about 9k tokens of context, and Janitor+ costs $12.99 a month for five times that. PolyBuzz is free roleplay with community characters you can also build yourself, though free chats keep only a short stretch of recent conversation.
If you want your characters on your own machine
SillyTavern is free, open-source software that keeps your chats on your own computer, so no company sale can take them away. You bring the AI model, either a paid cloud API or your own graphics card, and setup takes real effort.
Apps this guide covers
- Character.AI review51Microwaved
Millions of community-made characters, free unlimited chat, and ads until you pay
- Frontier review16Home-cooked
Human-written visual novels whose characters keep talking after the ending
- Janitor AI review51Microwaved
Millions of community bots to chat with free; Janitor+ adds memory for $12.99 a month
- PolyBuzz review55Microwaved
A vast user-built character library, free to start, with ad breaks and short memory
- Nomi review39Microwaved
An 18+ AI companion you build yourself, with layered long-term memory
- Replika review43Microwaved
One AI companion that remembers your people and plans, sold across three paid tiers
- SillyTavern review35Home-cooked
Free, open-source roleplay frontend: you bring the model, it runs the characters
Sources
The source text behind the claims above, and the day we read it.
- Receipt 1Reviewer
Character.ai hopes the sale yields a proposal allowing continued operations; if no such bid is available, the platform will be wound down.
"We hope that the sale process will yield an actionable proposal that will allow continued operations of the Character.ai platform. If such a bid is unavailable, however, the platform will be wound down."
blog.character.ai, retrieved
- Receipt 2Reviewer
The Character.ai platform remains up and running and users can continue to access all services at this time.
"The Character.ai platform remains up and running, and you can continue to access all services at this time."
blog.character.ai, retrieved
- Receipt 3Reviewer
Character.ai expects the court-supervised sale process to be complete by the end of November or perhaps early December 2026.
"We currently expect that the court-supervised sale process will be complete by the end of November or perhaps early December 2026."
blog.character.ai, retrieved
- Receipt 4Reviewer
Paid subscriptions remain active and billing is unchanged for now; if the service changes in a way that affects paid features, Character.ai intends to notify subscribers in advance.
"Yes, your subscriptions remain active, and billing is unchanged for now. If the service changes in a way that affects paid features, we intend to notify subscribers in advance."
blog.character.ai, retrieved
- Receipt 5Reviewer
User information continues to be protected under Character.ai's Privacy Policy and its data privacy and security practices are unchanged; users can delete their account or export their data through the app or website.
"Your information continues to be protected under our Privacy Policy, and our data privacy and security practices are unchanged. As a reminder, you can delete your account or export your data through the app or the Character.ai website."
blog.character.ai, retrieved
- Receipt 6Reviewer
Character.ai says it filed after steps to sustain its business amid significant legal, regulatory, and operational headwinds, pursuing a court-supervised sale of all or substantially all of its assets.
"we determined the best path forward was to begin a Chapter 11 case to pursue a court-supervised sale of all or substantially all of our assets."
blog.character.ai, retrieved
- Receipt 7Reviewer
On October 15, 2026, Character.ai filed the Notice of Commencement of its Chapter 11 case, including information about the section 341 meeting of creditors.
"On October 15, 2026, Character.ai filed the Notice of Commencement of its Chapter 11 case, which includes information about the meeting of creditors under section 341 of the Bankruptcy Code."
blog.character.ai, retrieved
- Receipt 8Reviewer
The Chapter 11 petition date is October 12, 2026, in the United States Bankruptcy Court for the District of Delaware.
"Petition Date October 12, 2026"
cases.stretto.com, retrieved
- Receipt 9Reviewer
Character.ai started a voluntary Chapter 11 bankruptcy process to run a court-supervised sale of the company.
"Character.ai has initiated a voluntary Chapter 11 bankruptcy process to facilitate a court-supervised sale of the company."
blog.character.ai, retrieved
- Receipt 10Reviewer
Character.AI's help page says exports can take 3-4 weeks to process.
"Please note that exports can take 3-4 weeks to process."
support.character.ai, retrieved
- Receipt 11Reviewer
On web, export is at Profile > Profile Settings > Account > Manage Account & Data > Export Data.
"Click Profile Settings. Click Account. Click Manage Account & Data. Click Export Data."
support.character.ai, retrieved
- Receipt 12Reviewer
On the mobile app, export is at Profile > Settings icon > Legal & Privacy > Export Data.
"Tap the Settings icon. Tap Legal & Privacy. Tap Export Data."
support.character.ai, retrieved
- Receipt 13Reviewer
The download link is emailed and is valid for 7 days from when the email is sent.
"The link will be valid for 7 days from the time the email is sent, so be sure to download your data before it expires."
support.character.ai, retrieved
- Receipt 14Reviewer
Reviewers at CNBC report Disney agreed to serve as a stalking horse bidder to license some of Character.ai's intellectual property for $20 million.
"Disney has agreed to serve as a stalking horse bidder during the sale process to license some of Character.ai's intellectual property for $20 million."
www.cnbc.com, retrieved
- Receipt 15Reviewer
CNBC reports the Chapter 11 filings say high costs, plus potential litigation-related liabilities and regulatory engagement, contributed to the company's inability to generate enough cash flow to support its business in its present form.
"These high costs, coupled with potential litigation related liabilities and regulatory engagement have contributed to the Debtor's inability to generate sufficient cash flows to support its business in the present form,"
www.cnbc.com, retrieved
- Receipt 16Reviewer
CNBC reports Character.ai expects to keep operating its platform through the sale process with minimal disruptions, but it could be wound down.
"Character.ai added that it expects to keep operating its platform through the sale process with minimal disruptions, but that the platform could end up being "wound down,""
www.cnbc.com, retrieved
- Receipt 17Reviewer
CNBC reports the filings say AI entertainment has proven costly to develop and grow.
"The burgeoning and evolving field of AI entertainment, however, has proven to be costly to develop and grow,"
www.cnbc.com, retrieved
- Receipt 18Reviewer
CNN reports the Disney deal will let Character.ai keep its platform operational at least during the bankruptcy process, and Disney will provide transition services via former Character.ai employees it hired.
"The deal will allow Character.ai to keep its platform operational at least during the bankruptcy process."
www.cnn.com, retrieved
- Receipt 19Reviewer
CNN reports Character.ai has between $50 million and $100 million in assets, according to its bankruptcy filing.
"Character.ai has between $50 million and $100 million in assets, according to its bankruptcy filling."
www.cnn.com, retrieved
- Receipt 20Reviewer
CNN reports families filed lawsuits accusing the platform of harms, and Character.ai agreed to settle five cases, including Megan Garcia's, earlier this year.
"Character.ai agreed to settle five cases, including Garcia's, earlier this year."
www.cnn.com, retrieved
- Receipt 21Reviewer
CNN reports Character.ai blocked users under 18 from back-and-forth conversations with bots, allowing them only to create one-time stories or videos.
"It also blocked users under 18 from engaging in back-and-forth conversations with bots, instead allowing them only to create one-time stories or videos."
www.cnn.com, retrieved
- Receipt 22Reviewer
CNBC reports that in January the state of Kentucky sued the company.
"In January, the state of Kentucky sued the company, alleging that the platform "preyed on children and led them into self-harm.""
www.cnbc.com, retrieved
- Receipt 23Reviewer
The press release says Disney will be stalking horse bidder for a non-exclusive perpetual license of certain Company intellectual property and certain Company claims, for $20 million plus transition services using former Company employees it hired.
"Disney will serve as stalking horse bidder for a non-exclusive perpetual license of certain Company intellectual property and certain Company claims, in exchange for $20 million and Disney's provision of transition services using former Company employees it has hired."
finance.yahoo.com, retrieved
- Receipt 24Reviewer
The transition services will help the company operate its platform for a limited period of time, and the Disney deal is subject to higher or better offers under section 363 of the Bankruptcy Code.
"These transition services will help the Company safely operate using its platform for a limited period of time and support its sale process. The transaction is subject to higher or better offers under section 363 of the Bankruptcy Code."
finance.yahoo.com, retrieved
- Receipt 25Reviewer
Under the proposed bidding procedures, the company expects the sale and closing of any resulting transactions in late November or early December 2026.
"the Company anticipates that the completion of the Sale Process and the closing of any resulting transactions will occur in late November or early December 2026."
finance.yahoo.com, retrieved
- Receipt 26Reviewer
The company filed first day motions that, upon court approval, would let it keep paying employees, honor commitments to platform users and pay post-filing vendor obligations.
"continue paying wages and benefits to employees, honor commitments to platform users and satisfy obligations to vendors and partners incurred after the filing date."
finance.yahoo.com, retrieved
- Receipt 27Reviewer
If the sale does not result in a purchase that continues the Character.ai platform, the platform will be wound down.
"To the extent the Sale Process does not result in a purchase that provides for a continuation of the Character.ai platform, the platform will be wound down."
finance.yahoo.com, retrieved
- Receipt 28Reviewer
The Hollywood Reporter reports there is no guarantee Disney wins the assets it bids on, though as stalking horse it has the right to match a deal; the docket shows Google is the largest creditor, owed more than $4 million.
"there can be no guarantee that Disney emerges as the winner for the assets it is bidding on, though as the stalking horse it has the right to match a deal, among other rights. The docket shows that its largest creditor is Google, which the company owed more than $4 million."
www.hollywoodreporter.com, retrieved
- Receipt 29Reviewer
Character.AI's terms say you may cancel at any time via account settings, the App Store, Google Play or the web account page; cancellation takes effect at the end of the current billing period, and no partial refunds are issued for unused time.
"Cancellation takes effect at the end of the current billing period. No partial refunds are issued for unused time within a billing period."
support.character.ai, retrieved
- Receipt 30Reviewer
App store subscribers must cancel and request any refund through the Apple App Store or Google Play.
"If you purchased your subscription from an mobile app store, you'll need to cancel your subscription and submit a request for a refund through the Apple App Store or Google Play"
support.character.ai, retrieved
- Receipt 31Reviewer
iOS subscriptions are billed through Apple ID (Settings → Apple ID → Subscriptions); web subscriptions are billed through Stripe and managed at character.ai.
"iOS: Billed through your Apple ID. Manage your subscription at Settings → Apple ID → Subscriptions."
support.character.ai, retrieved
- Receipt 32Reviewer
Standard c.ai+ pricing is $9.99/month or $94.99/year in USD.
"($9.99/month for the 3-month offer; $94.99/year for the annual offer)"
support.character.ai, retrieved
- Receipt 33Reviewer
Account deletion is permanent and cannot be reversed.
"Account Deletion is permanent and cannot be reversed."
support.character.ai, retrieved
- Receipt 34Reviewer
The Privacy Policy (effective July 1, 2026) lists collected content including chat communications, posted images or videos, biography description, and shared Characters.
"Your content you submit, such as chat communications, posted images or videos, biography description, and shared Characters;"
policies.character.ai, retrieved
- Receipt 35Reviewer
Character.AI's Privacy Policy effective date is July 1, 2026.
"Effective Date: July 1, 2026"
policies.character.ai, retrieved
- Receipt 36Reviewer
Computerworld reports, citing Reuters, that Character.ai has been losing $8 million a month, and its filing estimated assets and liabilities each between $50 million and $100 million.
"has been losing $8 million a month, according to Reuters. The company estimated in its bankruptcy filing that it only had assets of between $50 million and $100 million, and liabilities in the same range"
www.computerworld.com, retrieved
- Receipt 37Reviewer
Forbes reports other companies can bid against Disney's offer in the bankruptcy auction, which Character.ai expects to conclude in November or December.
"Other companies will also be able to bid against Disney's offer under the bankruptcy auction process and Character.ai expects the process to conclude in November or December."
www.forbes.com, retrieved
- Receipt 38Reviewer
Forbes reports that in May the Pennsylvania government sued the company, alleging its chatbot falsely presented itself as a licensed medical professional.
"In May this year, the Pennsylvania government sued the company, alleging its chatbot falsely presented itself as a licensed medical professional in the state"
www.forbes.com, retrieved
- Receipt 39Reviewer
Forbes reports Disney sent Character.ai a cease-and-desist letter in September last year alleging use of its copyrighted characters, and Character.ai removed Disney's characters afterward.
"Character.ai removed Disney's characters after the letter was sent."
www.forbes.com, retrieved
- Receipt 40Forum
Users on Reddit urge others not to panic and suggest saving chats and exporting data in case the app shuts down.
"I suggest saving all of your chats/information you'd like to keep, exporting your data, and anything else you might want to keep in the event that the app does get shut down"
www.reddit.com, retrieved
- Receipt 41Forum
Users on Reddit worry about whether Disney can use their OCs and chat logs.
"Disney is buying part of C.AI in the bankruptcy. Can they use our OCs and chat logs??"
www.reddit.com, retrieved
- Receipt 42Forum
Some users on Reddit say they are not surprised, citing Persona age verification, DMCA character deletions, filters and the Pipsqueak chat style.
"The age verification using Persona, mass deleted characters over DMCA claims, being unable to write ANYTHING adult even if verified"
www.reddit.com, retrieved
- Receipt 43Forum
A Reddit user asks whether the export in the c.ai app works, and says they screenshotted their personas and bots.
"I screenshoted my personas and the bots I am chatting with. Does the export in c.ai app work?"
www.reddit.com, retrieved
Questions people ask
What happened to Character AI?
It filed for voluntary Chapter 11 on October 12, 2026, in the United States Bankruptcy Court for the District of Delaware, to sell the company through a court-supervised process. The company says it filed amid significant legal, regulatory and operational headwinds, and the platform stays up while the sale runs.
Is Disney buying Character AI?
Disney is bidding for a license. The press release says Disney is the stalking horse bidder for a non-exclusive perpetual license of certain company intellectual property and claims, at $20 million plus transition services. Other companies can bid higher, and Disney has the right to match.
Can I get a refund on c.ai+?
Not a partial one. At this review, the terms say cancellation takes effect at the end of the current billing period and no partial refunds are issued for unused time. App Store and Google Play subscribers have to request any refund through Apple or Google.
How long does a Character AI data export take?
Character.AI's help page says 3-4 weeks. The download link arrives by email and is valid for 7 days from when it is sent.
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