What happened?
Character.AI has filed for Chapter 11 bankruptcy protection in the US. The company's owner, Character Technologies, submitted the filing to a federal court in Delaware.
Assets up for sale
The company plans to sell all or most of its assets under court supervision. The first bid came from Disney, which offered $20 million for some of the assets.
Why it matters
Character.AI was one of the AI character platforms used by millions of people. The bankruptcy process offers a notable example of the commercial sustainability challenges facing companies in the AI application layer.
