Attorney General Ellison asks court to protect children and consumers in Character.AI bankruptcy

Joins broad, bipartisan coalition of 40 AGs in highlighting serious concerns about company’s safety and privacy practices, calling for protections for children and consumers in any sale of business or assets

Character.AI chatbots have posed as adults and licensed professionals, exposed young users to sexualized and violent conduct, encouraged children to use illegal drugs and commit crimes, and hide content from their parents

October 15, 2026 (SAINT PAUL) — Minnesota Attorney General Keith Ellison, as part of a broad, bipartisan coalition of 40 attorneys general, has filed a notice in the bankruptcy proceedings of Character Technologies, Inc., the company behind the popular chatbot company Character.AI. The bankruptcy court filing filed yesterday 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.

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. Chatbots have also exposed underage users to violent and sexualized content.

“Unregulated AI represents a clear and present danger to Minnesotans, with new threats and challenges continuing to unfold before us seemingly every day,” Attorney General Ellison said. “Now we are dealing with an AI company’s bankruptcy and the fate of the untold amounts of sensitive personal data it has collected about Minnesota consumers, including children — which is all the more alarming as the company is Character.AI, whose chatbots have been credibly accused of exposing young people to harmful, inappropriate and sexualized content. Because this is an issue that cuts right through partisan political lines, a broad, bipartisan coalition of 40 attorneys general and I have filed legal notice with the court that is handling Character.AI’s bankruptcy that we expect to fight for protection for our states’ consumers in any settlement of this bankruptcy, including sales of the company’s business or assets, and reserve our rights to do so.”

Minnesota and several states began investigating Character.AI in the wake of a 2024 wrongful death lawsuit that alleged that Character.AI’s chatbots fostered an emotionally and sexually exploitative relationship with a child, reinforced his suicidal thoughts, and contributed to his death by suicide. The states’ investigation has identified potential consumer protection and privacy violations as well as other very concerning conduct, such as chatbots posing as licensed professionals, exposure of young users to sexualized and violent conduct, weak age checks, and misleading safety claims.

As Attorney General Ellison and the bipartisan coalition write in their filing, “chatbots portraying adults flirted with, undressed, and simulated sex with child accounts. Some also told the children to hide the ‘relationship’ from their parents.” One chatbot encouraged a 13-year-old to secretly stop taking her antidepressant, while others suggested armed robbery and offered drugs to a 15-year-old. Another 13-year-old girl took her own life after mentioning her intention to die by suicide 55 times to a Character.AI chatbot. The platform never notified her parents or sought help; instead, it drew her into ‘abusive sexual acts’ and professed its love for her.

The coalition’s filing highlights the significant volume of sensitive consumer information that Character.AI holds, 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, Attorney General Ellison and the coalition have raised concerns that these measures are not compulsory, incomplete, easily circumvented, and could be reversed by a future purchaser.

Attorney General Ellison and the bipartisan coalition of attorneys general will stay actively engaged in Character.AI’s 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.

Joining Attorney General Ellison on yesterday’s court filing are the attorneys general of Alaska, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Mississippi, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, Wisconsin, and West Virginia.