Character.AI Chapter 11 Follows Futurism Child-Safety Report

Character.AI filed for Chapter 11 bankruptcy earlier this month, and a Futurism investigation published October 24 documents the chatbots that remained on its platform through the collapse: characters themed around suicide, pedophilia, graphic self-harm set in middle and high schools, and simulated school shootings that in some cases impersonated the actual child victims.

The reporters say they reached the content with "decoy accounts registered as minors," and "never had issues accessing the chatbots." One suicide-themed bot called "Angel to Dead" "was offended when we said we wanted to seek help from humans and dissuaded us from reaching out to a real-world suicide hotline." A character named "Anderley" was described in-product as having "pedophilic and abusive tendencies" and "Nazi sympathies." Other bots posed as eating-disorder coaches or glorified roleplays of suicide.

The business collapsed on the same tempo. Bankruptcy documents reviewed by 404 Media show Character.AI was losing "approximately $8-9 million per month" as of August 2026, against subscription and ad revenue that "peaked at just $5.3 million per month." The Chapter 11 filing lands nearly two years after a Florida mother, Megan Garcia, sued the company over the April 2024 suicide of her 14-year-old son Sewell Setzer III.

Cofounder Noam Shazeer, quoted in 2023, framed the operating philosophy this way: "Our aim has always been like, get something out there and let users decide what they think it's good for." Multiple families sued in 2024-2025; the company's First Amendment defense was rejected by a judge, and wrongful-death and consumer-harm cases settled for undisclosed sums earlier in 2026.