kapynPolicy & Regulation

Now that Character.AI is going bankrupt, what happens to all of its users’ data?

New York Attorney General Letitia James warns that Character.AI’s Chapter 11 bankruptcy could expose consumer data to risky transfers. The AG joins 40 others to demand safeguards on data sold or moved during the sale, especially as Character.AI plans to sell assets to Disney. The move highlights regulatory scrutiny over AI data handling in insolvency.

The Verge·Oct 14, 2026

Opening Kapyn…