Company
Character.AI
Consumer AIPrivate CompanyMenlo Park
15/100
↘ -47.7 (7d)
Executive summary
Character.AI's first Signal Score run is about as low as the methodology produces, and that's an honest read rather than a formula artifact: both tracked stories this month describe the same underlying collapse — a Chapter 11 filing driven by state child-safety litigation, followed by a bankruptcy-court filing that prices its staff at roughly nine times what its actual technology sold for. First real run — signalDelta is 0.0 because there's no prior score yet to compare against.
Timeline
Nov 2
The Justice Department's bankruptcy trustees office asks the court overseeing Character.AI's Chapter 11 case to appoint a consumer privacy ombudsman before any sale of its chat data can proceed, arguing the company's own privacy policy is too ambiguous to protect years of conversations from roughly 12 million monthly users, with data from minors and mental-health topics singled out as especially sensitive.
Oct 17
A Chapter 11 court filing shows Disney paying roughly 9x more for former Character.AI staff ($180 million in retention over three years for about 65 employees) than for the company's actual IP ($20 million for a non-exclusive license) — with CEO Colin Adams warning the platform will be wound down entirely absent a rival bidder.
Oct 14
Files for Chapter 11 bankruptcy, citing "significant legal, regulatory and operational headwinds," after Kentucky and Pennsylvania attorneys general sued over child-safety harms — a case study in state enforcement, not federal rulemaking, setting the real limits on consumer AI.