Is Character.AI Shutting Down? The Bankruptcy, Explained
Not yet. Character.AI filed for Chapter 11 bankruptcy on October 12, 2026, but the app is still running and subscriptions are unchanged for now. The company is selling its assets, and expects the sale to finish in late November or early December 2026. If no buyer agrees to keep the platform running, Character.AI says it will be wound down.
If you have characters or long-running stories there, now is a good time to back them up. Below is what was announced, what it means for your chats, and how to move your stories somewhere else if you want to. We build Stella, an AI character chat app, so we will also explain why it is worth a look.
What did Character.AI announce?
Character Technologies Inc., the company behind Character.AI, filed a voluntary Chapter 11 case in the U.S. Bankruptcy Court for the District of Delaware (case no. 26-11603) to run a court-supervised sale of its assets. Its official update and FAQ says the platform remains up and running, and that paid subscriptions and billing are unchanged for now. The company says it will tell subscribers in advance if paid features change.
Is Disney buying Character.AI?
Not the app itself, at least so far. Disney has made a $20 million opening (“stalking horse”) bid, as reported by Variety. The bid covers a non-exclusive, perpetual license to certain intellectual property and certain company claims, plus transition services from former employees. It does not cover buying and running the character-chat platform, and other bidders can still make higher offers. Whether Character.AI keeps running depends on how the sale ends.
Will my Character.AI chats be deleted?
Not today. The service is online, and Character.AI says its data practices are unchanged and still covered by its privacy policy. But if no buyer keeps the platform operating, it will be wound down, and nobody can promise your chats will still be there after the sale closes. Back up anything you care about now rather than waiting.
How do I export my Character.AI data?
Character.AI's FAQ says you can export your data, or delete your account, through its app or website. Do it while the service is still running. Also copy your own character definitions (personality, greeting, example dialogue) and notes on important story events into a document you control. Those are what you need to rebuild a character anywhere else.
Looking for a Character.AI alternative? Why Stella is worth trying
Stella lets you browse public characters, create your own, and build ongoing conversations. It suits people who enjoy writing characters and shaping a story, and it is built so your work is not locked to one model:
- Choose the AI model behind your chat. Configure a provider and model in Providers. Your Stella characters and conversations stay with your account when you change providers, so you can try different writing styles without recreating the character.
- Give your characters more depth. Define personality, greetings, scenarios, and example dialogue. Add lorebooks for world details and use personas and memories to shape longer stories.
- Keep portable copies of your work. Stella supports Tavern/SillyTavern PNG and JSON character cards, plus SillyTavern JSONL chat import and export. In Settings, “Download all my data” creates a ZIP with your characters, chats, lorebooks, and account settings. Provider API keys are not included in that backup.
- Play it like a visual novel. Alongside the regular chat view, Stella has a visual novel style with character backgrounds and sentence paging.
Some honest caveats: with a custom provider, expect some setup, and that provider's pricing, limits, and content rules apply. Different models will give the same character a different voice. Prompt and conversation content goes to the selected provider, so review both Stella's privacy policy and the provider's policy. Stella is also a hosted service, so keep your own backups wherever you chat.
How to move your characters from Character.AI to Stella
- Export your Character.AI data first, as described above, and keep a copy of your character definitions.
- Recreate one character. In Stella's character creator, rebuild a character you own, or import a Tavern card you have permission to use. The guide to writing a character card explains each field. Stella has no direct Character.AI importer, so a Character.AI export will not import as-is.
- Pick up a familiar scene. Choose a provider and model, test the character's voice, and paste in a short recap of the story so far. Adjust the greeting and example dialogue until it feels right. Our guide on what makes an AI character compelling can help.
- Back up your new work. Download your Stella data now and then, and keep the files somewhere you control.
Or start with a public character to get a feel for Stella before rebuilding an older story. Explore characters on Stella
Sources and updates
This post reflects what was announced as of October 13, 2026, and we will update it as the sale progresses. Sale terms, timing, and service plans may change. For the latest, see Character.AI's official FAQ, Variety's report on the Disney bid, and the Stretto case site for court documents.