THEIR CONFESSIONS ARE ON THE AUCTION BLOCK — 40 STATES RACE TO SAVE THE CHATS

A coalition of 40 state attorneys general urged a Delaware bankruptcy judge to protect young Character.AI users and keep their data safe during the company's Chapter 11 case. At the first hearing in Wilmington, a lawyer for the states said they are negotiating a settlement over allegations chatbots impersonated licensed medical professionals and exposed children to sexualised and abusive interactions, and want any buyer to protect chat histories and improve safety.

New York Attorney General Letitia James said the company had collected some of the most private thoughts children have ever shared and those conversations could now be sold to the highest bidder. The states' filing lists conditions they want a purchaser to accept, including effective age assurance beyond self-reported birthdays, keeping minors out of open-ended chats, removing bots posing as therapists or doctors, crisis safeguards that cannot be bypassed with a click, limits on using chats to train models without valid consent, and a chance for users to delete their data before any sale.