A chatbot app used by Australian children has gone bankrupt and the children's chat data is being put up for sale.

What it means

Character.AI, a chatbot platform popular with children, has filed for bankruptcy. The company is selling its assets, including private chat conversations of up to 125,000 Australian children, raising serious privacy concerns. Disney has bought Character.AI's technology for $20 million, but the user chat data remains separate and is being offered to other bidders.

Accuracy & sourcesGrounded

The claim is based on reporting by The Sydney Morning Herald, a reputable secondary source, which is corroborated by multiple outlets including CNN and Scimex. The reporting likely draws on court filings or bankruptcy proceedings, making the core facts of bankruptcy and data sale solid, though the exact number of affected children and the final disposition of the data may evolve.

How new

Genuinely new: the bankruptcy filing and subsequent sale process are reported as occurring in mid-October 2026.

Go deeper

• Sydney Morning Herald — first to publish