- A coalition of AGs has filed notice in the bankruptcy proceedings of Character Technologies, Inc., the company behind the chatbot company Character.AI, which identifies serious concerns about the company’s safety and privacy practices and call for protection for children and consumers in any sale of the company’s businesses or assets. The state’s concerns include the collection of sensitive personal information through Character.AI chatbots, including private conversations about users’ mental health, relationships, and emotional struggles.
- The filing follows a multistate investigation launched after a 2024 wrongful death lawsuit alleged that a Character.AI chatbot contributed to a child’s suicide. The investigation identified potential consumer protection and privacy violations. The coalition is seeking safeguards for consumer data and children’s online safety in any sale or transfer of the company’s assets. The states also reserved the right to challenge proposed sale terms or bankruptcy plans and seek additional protections.
- Separately, a bipartisan group of AGs from Arizona, Arkansas, Florida, Idaho, Iowa, Kansas, Montana, Nebraska, and West Virginia filed individual lawsuits in their respective states against OpenAI regarding allegations that the company has endangered children, deceived parents, and violated consumer protection laws. WV AG McCuskey, for example, discussed the lack of age verification and guardrails for conversations about suicide, school shootings, or self-harm.