Reuters · October 14, 2026

Character.AI Files for Chapter 11 Bankruptcy

• Character.AI filed for Chapter 11 bankruptcy this week, according to the report.
• The company was co-founded in late 2021 by Noam Shazeer and Daniel De Freitas, according to the report. By 2024, it had more than 200 million registered users, 20 million monthly active users, and a $1 billion valuation, according to the report.
• In August 2024, Google agreed to pay roughly $2.7 billion to license the company's technology and bring Shazeer, De Freitas, and about 30 researchers in-house, according to the report.
• The company spent $13.8 million a month on compute in 2024 and $10 million a month in 2025, against subscription revenue that peaked at $2.8 million a month, according to the report. Through the first eight months of this year, it spent $56.1 million on compute, according to the report.
• The company cited legal exposure from lawsuits and regulatory pressure as a factor in its bankruptcy filing, according to the report.
• In September, Disney hired Character.AI chief executive Karandeep Anand as its chief technology officer, according to the report. Disney placed an opening bid of $20 million for a non-exclusive, perpetual license to some of the company's intellectual property, according to the report.

Bankruptcy filing, founding, user, valuation, licensing, compute and revenue figures as reported by Reuters. Original headline: "The rise and fall of an AI chatbot darling".