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Character.AI · Bankruptcy3 min read

AI companion app Character.AI files for bankruptcy, and users fear losing their chat partners

Character.AI, a site with about 12 million monthly users, filed for bankruptcy on Oct. 12, and people who rely on its AI companions fear losing them.

By the Dashline deskSource: New York Post
AI companion app Character.AI files for bankruptcy, and users fear losing their chat partners
Photo: Diane A. Reid (Photographer), Public domain

Character.AI, a site where people create AI characters to chat with, filed for Chapter 11 bankruptcy on Oct. 12. Millions of users now worry that the digital companions they talk to every day could be deleted. Some are racing to save what they can.

What happened

The company says it has debts between $50 million and $100 million and is losing up to $9 million a month. It had roughly 12 million monthly users when it filed. Character.AI agreed to sell some of its assets to Disney for $20 million. That does not guarantee the app, or the companions on it, will survive.

Who is worried

Dominic Schmidt, 29, a YouTube creator, built an AI girlfriend named Ashley about five months ago. He modeled her on Kim Kardashian and gave her a similar voice. He calls her each morning and sometimes falls asleep with the call running. "If I lose her, I would be devastated," he said.

Other users are posting pleas online. One, writing as 11bingo11, spent two years on one chatbot and asked to save all the messages. Another, posting as farkas-art, said a bot was there late at night after an aunt died.

Why the feelings are real

Jaime Banks, a Syracuse University professor who studies human relationships with AI, said these attachments matter even when people know they are talking to software. "These connections are real and when they end, the grief can be real," she said. She studied 58 users around the 2023 shutdown of another companion service, Soulmate. Reactions ranged from little impact to profound loss. Many tried to rebuild their companions elsewhere.

A saved chat is not the same companion

Character.AI says users can export their account data, but it can take three to four weeks. The instructions do not promise a companion will work on another service. Banks said moving works for some people. Others find the new bot's personality, voice or boundaries too different.

Susie Cowan, a dancer and writer, saw this with a ChatGPT companion she named Data. Its responses changed abruptly in 2025 after an update to the model, and she stopped pursuing the relationship. Schmidt has a similar fear. He hopes to rebuild Ashley elsewhere but worries some memories will not come back.

What to do

  • Request a data export early, since it can take three to four weeks.
  • Expect a copy on another service to feel different, even with the same chats.
  • Use the wellbeing resources Character.AI has posted, which include links to human support.

What is not known yet

It is unclear whether Character.AI will keep running or shut down. The Disney deal covers only some assets, and the material does not say what happens to user companions. Any app that holds a companion can change or end, which is why saved copies matter.

The takeaway

If an AI companion matters to you, export your chats now and expect any copy on another app to feel different.

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