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An AI chatbot files for bankruptcy. Is it a bad omen for the industry?

NPR | By John Ruwitch
Published October 21, 2026 at 3:40 AM CDT

Character.AI, which lets users create custom chatbots for immersive roleplaying, has filed for Chapter 11 bankruptcy following a string of legal challenges and the loss of top talent.

Copyright 2026 NPR
John Ruwitch
John Ruwitch is a correspondent with NPR's international desk. He covers Chinese affairs.