Character.AI Sale Update: Will It Shut Down? Your Chats and c.ai+

How this guide was made. This is a documentation-based guide. On 27 October 2026 we read Character.AI’s 12 October 2026 blog post, its press release, its Privacy Policy and Terms of Service, the relevant help centre articles, and the case website and court notice published by its claims agent, Stretto. Quotes and dates come from those pages. We did not speak to the company and nothing here is legal or financial advice. Our method is set out on how we review.

The short version

Update, 5 November 2026: on 30 October 2026 the Delaware bankruptcy judge approved the bidding procedures for the sale, including the $20 million stalking horse bid from Disney, according to Law360. That means the auction process can go ahead. Character.AI has not posted anything new since 16 October, the platform is still running, and the official case page does not yet list a bid deadline or auction date. With exports taking 3 to 4 weeks and the sale expected around late November, now is the time to request yours.

Character.AI is not closing today. On 12 October 2026 its parent company, Character Technologies, Inc., filed for Chapter 11 bankruptcy so that it can sell the business under court supervision.

The company says the app and website keep working, paid subscriptions keep running and your data is still covered by the same Privacy Policy. It expects the sale to be finished by late November or early December 2026.

The important caveat: if no buyer wants to keep the platform running, Character.AI says it will be wound down. So the sensible move for anyone who cares about their chats is to request a data export now, while everything still works.

What Character.AI announced

The blog post, titled “An Update on Character.ai”, opens plainly: “Character.ai has initiated a voluntary Chapter 11 bankruptcy process to facilitate a court-supervised sale of the company.”

It gives the reason as “significant legal, regulatory, and operational headwinds” over the past year, and says the board decided a court-supervised sale “provides us with the best opportunity to maximize value for all of our stakeholders.”

On the future of the service it says: “We hope that the sale process will yield an actionable proposal that will allow continued operations of the Character.ai platform. If such a bid is unavailable, however, the platform will be wound down.”

For users right now, the post says: “The Character.ai platform remains up and running, and you can continue to access all services at this time.”

The sale and the expected timeline

According to the case page run by Stretto, the petition was filed on 12 October 2026 in the US Bankruptcy Court for the District of Delaware, case number 26-11603 (BLS), before Judge Brendan Linehan Shannon.

The press release, issued the same night, says the company is selling “all or substantially all of its assets” through a process under section 363 of the US Bankruptcy Code. In that kind of sale, an opening bid is set and other bidders can try to beat it.

That opening bid, known as a stalking horse, comes from Disney Worldwide Services, Inc. The press release describes it as a bid “for a non-exclusive perpetual license of certain Company intellectual property and certain Company claims, in exchange for $20 million” plus transition services from former Character.AI employees Disney has hired. Those services, it says, “will help the Company safely operate using its platform for a limited period of time.”

Read carefully, that is a licence of some intellectual property, not a purchase of the Character.AI app. The press release does not say the Disney bid would keep the platform running. The deal is “subject to higher or better offers”, so another bidder could still come forward.

The Stretto page listed a hearing on the bidding procedures for 30 October 2026 and lists a meeting of creditors on 19 November 2026. Law360 reported on 30 October that the judge approved the bidding procedures that day, including the Disney stalking horse bid. Both the blog and the press release expect the sale to complete by the end of November or early December 2026. Those are the company’s expectations, not fixed dates.

What happens if there is no buyer

Character.AI uses the same words in both the blog and the press release: if the sale does not lead to a purchase that continues the platform, “the platform will be wound down.”

Neither source says how a wind-down would work, how much notice users would get, or whether chats would be deleted or kept for a period. We found no official answer to those questions. That gap is the main reason to export your data early rather than wait.

Do subscriptions and billing continue?

Yes, for now. The blog’s FAQ answers the question “Is my paid subscription still active?” directly: “Yes, your subscriptions remain active, and billing is unchanged for now. If the service changes in a way that affects paid features, we intend to notify subscribers in advance.”

The press release adds that the company filed first day motions which, if the court approves, would let it “honor commitments to platform users” among other things.

Two points from Character.AI’s Terms of Service (last updated 27 August 2025) are worth knowing:

• Subscriptions renew automatically “until you cancel”, and you can cancel at any time.
• “Payments are non-refundable, except where required by law.” If you subscribed through Apple or Google, the Terms say you cancel and ask for a refund through that app store.

The Terms also say Character.AI may “discontinue providing the Services, or any part thereof, with or without notice.” The company’s stated intention to give subscribers advance notice is therefore a statement of intent in the blog, not a promise written into the Terms.

If you are weighing whether the paid tier is still worth it, our c.ai+ worth it guide covers what you get.

What happens to your data and chats in a sale

The blog says: “Your information continues to be protected under our Privacy Policy, and our data privacy and security practices are unchanged.”

The Privacy Policy (effective 1 July 2026) lists chat communications among the content it collects. Its Business Transfers clause says Character.AI “may disclose certain information, in connection with or during negotiations or closing of any merger, sale of company assets, financing, or acquisition of all or a portion of our business to another company.”

The Terms of Service add that Character.AI “may assign or transfer these Terms, in whole or in part, without restriction.”

In plain terms, the documents allow information, including chats, to be shared with a buyer as part of a deal. They do not say a buyer must keep the same privacy rules. The Privacy Policy does say that material changes to the policy will come with “appropriate notice”, for example by email or a prominent notice in the app.

The policy also lists rights that may apply depending on where you live, including access to a copy of your data, deletion and transfer to another provider. You can contact privacy@character.ai or the support form to use them. For a wider look at how companion apps handle data, see our privacy and safety guide.

How to export your chats and data

The blog links to a help centre article, “How do I download my data?”, created on 8 October 2026. It gives these steps.

On the web:

1. Go to your Profile.
2. Click Profile Settings.
3. Click Account.
4. Click Manage Account & Data.
5. Click Export Data.

In the mobile app:

1. Open your Profile.
2. Tap the Settings icon.
3. Tap Legal & Privacy.
4. Tap Export Data.

An older help article gives a slightly different mobile path (Settings icon, then Export my data), so the menu may vary by app version.

What happens next, per the help centre:

• The export “may take 3-4 weeks to complete.”
• A download link is emailed to the address on your account.
• The link is valid for 7 days, so download it promptly.

The article does not list exactly what the file contains or its format, so we cannot confirm that every chat is included. If something is missing, contact support while the service is still running.

What to do now: a practical checklist

1. Request your export today. With 3 to 4 weeks of processing and a sale expected around late November, waiting is the main risk.
2. Check your account email. The link goes there and expires after 7 days. Make sure you can still log in to that inbox.
3. Do not delete your account first. The help centre says deletion is permanent and cannot be reversed. Wait until the export has arrived and you have opened it.
4. Check how you pay. On the website, the help centre says to go to Settings, Account, Manage, then the Customer Portal. On iPhone or Android, the subscription is managed through Apple or Google.
5. Monthly billing: you can cancel any time and keep using the free tier, which Character.AI says still offers free and unlimited messaging. Cancelling stops the next renewal.
6. Yearly billing: you have already paid ahead, and the Terms say payments are non-refundable except where required by law. Turn off auto-renewal if you do not want another year, and keep your receipt in case features change. Our cancel and refund guide shows where to do that for App Store, Google Play and web subscriptions.
7. Save the characters you care about. If you wrote detailed character definitions, copy them somewhere you control. Our memory fix guide explains what the app does and does not remember.
8. Look at alternatives calmly. You do not need to leave, but it helps to know your options. See our Character.AI alternatives, the best free AI companion apps and our Replika vs Nomi comparison.

If the app stops loading during this period, check our Character.AI not working guide before assuming the worst.

Dated timeline

What we could not confirm

• Whether any bid so far would keep the Character.AI platform running. The only named bid is for an intellectual property licence.
• The bid deadline, auction date and sale hearing date. The bidding procedures were approved on 30 October, but the official case page did not list these dates when we rechecked on 5 November 2026. Third-party case summaries quote dates from the original motion; we will not repeat them until the official pages confirm them.
• How a wind-down would work, how much notice users would get, or what would happen to stored chats.
• Whether user data would be included in any sale, or whether a buyer would keep the current Privacy Policy.
• Exactly what a data export contains and in what format.
• Whether yearly subscribers would get partial refunds if paid features end.

What we will update

We will recheck the official pages and update this guide when the official case page lists the bid deadline and auction date, after the meeting of creditors on 19 November 2026, and when a buyer, an auction result or a wind-down is announced. Each change will be listed in the change log on this page. You can also follow our Character.AI hub for related coverage.