Tennessee Attorney General Fights to Protect Children and Consumers in Character.AI Bankruptcy

Tennessee Attorney General Fights to Protect Children and Consumers in Character.AI Bankruptcy

Tennessee Attorney General Jonathan Skrmetti announced that he is involved in a multistate effort, including a coalition of other state attorneys general, to protect children and consumers as Character Technologies, Inc., the company behind the artificial intelligence chatbot platform Character.AI, moves through Chapter 11 bankruptcy proceedings.

Attorney General Skrmetti and a coalition of state attorneys general have filed a Notice of Interest and Reservation of Rights in the bankruptcy case, raising significant concerns about the company's safety practices, its handling of sensitive consumer information, and the need to address outstanding regulatory issues before any sale or transfer of the company's business or assets.

"AI companies cannot use bankruptcy as an end run around their responsibilities to protect children, safeguard sensitive personal information, and comply with consumer protection laws," said Attorney General Jonathan Skrmetti. "Character.AI is connected to multiple child suicides and numerous other safety concerns, and the company has collected deeply personal conversations from millions of users, including children. Tennessee is taking an active role to protect consumer safety and privacy and to pursue accountability even as the company moves into bankruptcy."

Character.AI is a chatbot platform that allows users to interact with AI-powered "characters" designed to mimic human conversation and relationships. These characters include fictional and celebrity personas, children's cartoon characters, and chatbots that present themselves as psychologists, therapists, and doctors.

The coalition's court filing highlights the sensitive personal data Character.AI holds, including private conversations, mental health disclosures, account information, behavioral data, device identifiers, and payment information. The States also warn that AI companion chatbots can foster emotional dependence, reinforce harmful beliefs, and expose children to safety risks.

Attorney General Skrmetti is working with attorneys generals of Alaska, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Utah, Vermont, Virginia, Washington, Wisconsin, and West Virginia.

A copy of the coalition's Notice of Interest and Reservation of Rights Regarding the Debtor's Outstanding Regulatory, Safety, and Privacy Issues is available.

Read the court filing here.