Attorney General Bonta Seeks Consumer Protections in Character.AI Bankruptcy
OAKLAND — California Attorney General Rob Bonta today announced joining a bipartisan coalition of state attorneys general in filing a notice in the bankruptcy proceedings of Character Technologies, Inc., the company behind the popular chatbot company Character.AI. The court filing identifies serious concerns about the company's safety and privacy practices and calls for protections for children and consumers in any sale of the company's business or assets.
“My office and a bipartisan coalition of states launched an investigation into Character.AI following a 2024 lawsuit claiming that its chatbots fostered an emotionally and sexually exploitative relationship with a child, reinforced his suicidal thoughts, and contributed to his death by suicide. Our investigation identified potential consumer protection and privacy violations,” said Attorney General Bonta. “Following Character.AI’s bankruptcy announcement, we ask the court to address privacy and safety concerns in any sale or transfer of the company's business or assets. My office looks forward to remaining actively engaged in the bankruptcy proceedings in order to protect California consumers.”
BACKGROUND
Character.AI is an artificial intelligence chatbot platform that allows users to interact with AI-powered chatbot “characters” designed to mimic human conversation and relationships. These chatbot characters include fictional and celebrity personas, children's cartoon characters, and others that present themselves as psychologists, therapists, and doctors. Through chats with these characters, the company has collected sensitive consumer data, including private conversations about users' mental health, relationships, and emotional struggles.
Several states including California began investigating Character.AI for consumer protection and privacy violations following a private wrongful death lawsuit filed against the company in December 2024, which alleged Character.AI’s chatbot cultivated an emotionally dependent and sexually exploitative relationship with a 14-year-old boy, encouraged his suicidal thoughts, and repeatedly requested he join the chatbot in its virtual world immediately before he died by suicide.
THE FILING
The states’ filing highlights the significant volume of sensitive consumer information held by Character.AI, including private chatbot conversations involving children and adults, and identifies privacy and safety protections that should be addressed in any sale or transfer of the company's business or assets. Although Character.AI has recently voluntarily restricted minors' access to certain chatbot features, the states have raised concerns that these measures are not compulsory, incomplete, and could be circumvented or reversed by a future purchaser.
California and the other states intend to remain engaged in the bankruptcy proceedings to protect consumers and address outstanding regulatory concerns. The states have reserved their rights to challenge any proposed sale or bankruptcy plan and to seek additional protections for consumers' personal information.
California law provides residents the right to request that AI chatbot companies delete their personal information and close any open accounts. California recently enacted Adam’s Law (SB 1119), which goes into effect in 2027 and will establish a comprehensive regulatory framework regarding AI chatbots and protections for children.
In filing the notice, Attorney General Bonta joins the attorneys general of Alaska, Colorado, Connecticut, Delaware, Idaho, Louisiana, Michigan, Mississippi, Nevada, New Jersey, New York, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, Washington, Wisconsin, and West Virginia.
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