{"version":1,"type":"story","url":"https://digestai.news/story/character-ai-files-for-bankruptcy-sells-assets-to-disney-for-20m-data","json":"https://digestai.news/story/character-ai-files-for-bankruptcy-sells-assets-to-disney-for-20m-data.json","markdown":"https://digestai.news/story/character-ai-files-for-bankruptcy-sells-assets-to-disney-for-20m-data.md","slug":"character-ai-files-for-bankruptcy-sells-assets-to-disney-for-20m-data","headline":"Character.ai files for bankruptcy, sells assets to Disney for $20m, data could be sold","summary":"Character.ai announced it is filing for bankruptcy and has agreed to sell some of its assets to Disney for $20 million (£14.95 million). The sale does not include user data, and court filings indicate the company may sell that data to other buyers. Experts warn that the personal messages and sensitive information shared with the platform’s chatbots could end up in the hands of unknown parties.\n\nCalli Schroeder, director of the AI and Human Rights Program at the Electronic Privacy Information Center, says the risk is heightened because people often disclose intimate details to personified bots. She notes that bankruptcy clauses often exempt companies from privacy promises, leaving data vulnerable. A coalition of 40 U.S. state attorneys general has asked a judge to impose child‑safety and privacy safeguards, though their enforceability is uncertain. The article also cites a tragic case where a teenager allegedly acted on advice from a Character.ai bot.\n\nSchroeder and law professor Melissa Jacoby stress that without stronger rules, data from AI services could become a lucrative asset in future bankruptcies. The piece ends with practical steps for users to delete their data from the platform, acknowledging that the process may require effort and may not be uniformly available worldwide.","keyPoints":["Character.ai files for bankruptcy and sells assets to Disney for $20 million","Court filings say Character.ai can sell user data to other buyers","40 US state attorneys general seek child‑safety and privacy protections in the bankruptcy case"],"whyItMatters":"If AI companies' user data can be sold during bankruptcy, billions of personal conversations could become publicly accessible, raising major privacy and safety concerns.","category":{"slug":"business","name":"Business & Funding","url":"https://digestai.news/category/business"},"entities":{"companies":["Character.ai","Disney","Electronic Privacy Information Center"],"models":[],"people":["Calli Schroeder","Melissa Jacoby"]},"firstPublishedAt":"2026-10-29T10:00:00Z","updatedAt":"2026-10-29T10:00:00Z","sourceCount":1,"hasPrimarySource":false,"sources":[{"outlet":"bbc.co.uk","title":"The AI bubble could expose your deepest secrets","url":"https://bbc.co.uk/future/article/20261029-the-ai-bubble-could-expose-your-deepest-secrets","publishedAt":"2026-10-29T10:00:00Z","type":"press","primary":false,"lead":true}],"sourceNotes":null,"discussions":[],"thread":{"title":"Disney Acquires Character.AI Amid Bankruptcy","url":"https://digestai.news/thread/character-ai-initiates-voluntary-chapter-11-bankruptcy","storyCount":5},"cite":{"text":"Digest AI, \"Character.ai files for bankruptcy, sells assets to Disney for $20m, data could be sold\", 29 October 2026, https://digestai.news/story/character-ai-files-for-bankruptcy-sells-assets-to-disney-for-20m-data","publisher":"Digest AI","title":"Character.ai files for bankruptcy, sells assets to Disney for $20m, data could be sold","datePublished":"2026-10-29T10:00:00Z","url":"https://digestai.news/story/character-ai-files-for-bankruptcy-sells-assets-to-disney-for-20m-data"},"generatedBy":"Written by Digest AI's editorial model from the linked sources; the sources are the record.","license":"Headlines, digests and key points are written by Digest AI and may be quoted with a link to the story page. Linked articles belong to their publishers. Terms: https://digestai.news/terms#reuse"}