We use artificial intelligence to work, find information, and even have personal conversations. But there is one question we rarely ask: What happens to our data if the company behind an AI platform goes bankrupt or is sold?

The recent case of Character Technologies, the company behind Character.AI, has brought this issue into focus after the company filed for Chapter 11 bankruptcy protection in the United States.

Millions of conversations at stake

According to KQED, Character.AI has approximately 12 million monthly users, including at least 2 million children.

Platforms like these can store large amounts of information generated through user conversations. When a technology company faces a potential sale, an important question arises: what happens to that information, and who could eventually have access to it?

Authorities from several U.S. states have called for stronger protections, including limits on using conversations to train AI and giving users the opportunity to delete their data before a sale.

Privacy is part of technology, too

This case is an important reminder for both users and businesses. Before using any digital platform, particularly one powered by AI, it is important to understand what information it collects, how it is stored, how it may be used, and what options users have to delete it.

For companies developing digital solutions, privacy and data protection should also be considered from the beginning of the development process.

Fun Fact

According to documents cited by KQED, Character.AI's underage users spend approximately two hours per day on the platform. That gives us an idea of just how much information a single user could potentially share with a chatbot over time.

Reference: Rachael Myrow, KQED, “Your Chatbot Just Went Bankrupt. What Happens Now to Your User Data?”, published October 14, 2026 and updated October 16, 2026.