Can Character.AI Sell Your Chats? What the Sale Means
By myaicompanion Editorial · Updated 2026-10-23
Your Character.AI chats are not part of Disney's bid, but they are still on the table in the Character.AI sale.
I find this the most worrying part of the whole bankruptcy, and it gets far less attention than the Disney headline.
That is the part of the bankruptcy most users have not noticed yet. Below is what the filings say about user data, what 40 state attorneys general asked the court for, and what you can do before bids are due on November 20.
Quick answer. Disney's $20 million offer is a license to technology, and reporting on the deal says user data, chats and finished models stay with the bankrupt company. That means another bidder could still try to buy them. A coalition of 39 states and Washington, D.C. has asked that any buyer give users a real chance to delete their data first. If you care about your chats, export them now, then decide whether to delete them.
What Disney's bid covers, and what it leaves behind
Character Technologies, the company behind Character.AI, is in Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.
Disney is the stalking-horse bidder, which means its $20 million offer sets the floor that other bidders must beat.
According to an analysis of the deal by Beri, the offer is "a non-exclusive, perpetual license to certain Company intellectual property and certain Company claims."
The same analysis says the license leaves out the app, the brand, the domains, user data and chats, training data and finished models.
In its words, "user data, user inputs and outputs and the finished models stay in the estate."
That means Disney is not buying your chats.
The open question is who, if anyone, ends up with them.
| Asset | In Disney's bid? | What can happen to it |
|---|---|---|
| Certain IP and claims (license) | Yes | Licensed to Disney if it wins |
| The Character.AI app and brand | No | Other bidders can bid |
| User accounts, chats, inputs and outputs | No | Other bidders can bid, subject to the court |
| Finished models and training data | No | Other bidders can bid |
For the full terms of Disney's offer and the sale calendar, read Disney and Character.AI: what the $20M deal buys.
Can a buyer get your chats?
It is possible, and the court decides.
Assets that stay in the estate can be offered to other bidders, and the proposed deadline for bids is November 20, 2026.
Reporting on Character.AI's privacy policy says it allows information to be shared in a merger or a sale of company assets, without spelling out which information.
That wording matters because of a specific rule in U.S. bankruptcy law.
The consumer privacy ombudsman rule
Section 363(b)(1) of the Bankruptcy Code limits sales of personal information when the sale would conflict with the company's own privacy policy.
In that situation, the court appoints a consumer privacy ombudsman, an independent person who reviews the sale and tells the judge how to protect users.
Because Character.AI's policy mentions transfers in a sale, the company could argue that no ombudsman is required.
A judge can still appoint one.
As of mid-October 2026, TechTimes reported that none had been appointed.
What 40 attorneys general asked for
On October 14, 2026, attorneys general from 39 states and the District of Columbia filed a 28-page "Notice of Interest and Reservation of Rights" in the case, according to TechTimes.
They listed nine conditions they want any buyer to meet.
Three of them speak directly to your data:
- A deletion window. Users should get "a meaningful opportunity to delete their data before any sale of that data to a third party."
- Limits on new uses. Chat content should not be used to train AI models or serve advertising beyond what users originally agreed to.
- Real age checks. Age assurance that goes beyond a self-declared birth date.
The states also kept the right to ask for a privacy ombudsman and to object to the sale procedures.
These are requests, not rulings.
The judge, Brendan L. Shannon, has not ordered them.
Why this matters more than for most apps
Companion chats are not shopping carts.
People tell these bots about their relationships, health, loneliness and fantasies.
TechTimes cites company records from a Kentucky lawsuit showing more than 21.6 million U.S. accounts created by March 2025, including more than 2.1 million with a declared age under 18.
That is a lot of very personal text sitting in an estate that is up for sale.
What you can do before November 20
1. Export your data
Character.AI says you can request a data export through the app or the website.
Do it first, so you keep a copy whatever happens next.
My bankruptcy guide explains what the export does and does not keep.
2. Decide whether to delete
Deleting your data reduces what could be transferred to a buyer.
It is also permanent, so export before you delete.
If your chats contain things you would not want a stranger to read, deleting after exporting is the cautious choice.
3. Watch the sale hearing
The proposed schedule has an auction on November 23 if there are competing bids and a sale hearing on November 24, 2026.
That hearing is when the judge decides who gets what, and under which conditions.
I will update this page after it.
Frequently asked questions
Is Disney buying my Character.AI chats?
No.
Reporting on the deal says Disney's bid is a technology license and that user data, inputs, outputs and finished models stay in the estate.
Can someone else buy my Character.AI data?
Possibly.
Assets left in the estate can be offered to other bidders, any sale needs court approval, and the states have asked for protections.
What is a consumer privacy ombudsman?
It is an independent person a bankruptcy court can appoint when a sale of personal information would conflict with the company's privacy policy.
They report to the judge on how to protect users.
Should I delete my Character.AI data?
Export it first, then decide.
Deleting is permanent, but it reduces what a buyer could receive.
When will the Character.AI sale be decided?
Bids are due November 20, with an auction on November 23 if needed and a sale hearing on November 24, 2026, all subject to court approval.
The bottom line
The Character.AI data sale question is still open: Disney is not taking your chats, but the estate still holds them.
Export your data now, decide whether to delete it, and watch the November 24 hearing.
How I report. This guide relies on press reporting of court filings in In re Character Technologies, Inc. (D. Del.), linked above. I have not reviewed the docket directly, and details may change as the court rules. Last checked on October 23, 2026. This is not legal advice. myaicompanion Editorial
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