Kentucky Attorney General Seeks Consumer Protections in Character.AI Bankruptcy

Allows Kentucky and other states to reserve their rights to challenge any proposed sale

Kentucky Attorney General Russell Coleman announced Kentucky is joining a coalition of state attorneys general in filing a notice in the bankruptcy proceedings of Character Technologies, Inc., the company behind the popular chatbot company Character.AI.

The court filing identifies serious concerns about the company's safety and privacy practices and calls for protections for children and consumers in any sale of the company's business or assets. Additionally, it allows Kentucky and other states to reserve their rights to challenge any proposed sale or bankruptcy plan and to seek additional protections for consumers' personal information.

Earlier this year, Attorney General Coleman became the first state AG to launch a lawsuit against the company, alleging it preyed on children and led them into self-harm. Character.AI’s artificial intelligence chatbot platform allows users to interact with AI-powered chatbot “characters” designed to mimic human conversation and relationships. Through chats with these characters, the company has collected sensitive consumer data, including private conversations about users' mental health, relationships, and emotional struggles. 

Last week, a Franklin Circuit Court ruled in favor of Attorney General Coleman to unseal the Commonwealth’s entire lawsuit against Character.AI, showing the shocking damage the company caused to children.

“The safety of Kentucky kids remains a top priority. We are continuing to take legal action against the company and the owners for the harms they’ve done to our young people,” said Attorney General Coleman.

Joining Attorney General Coleman on the court filing are the attorneys general of Alaska, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, 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, Tennessee, Utah, Vermont, Virginia, Washington, Wisconsin and West Virginia.