Is Character.AI shutting down? App still runs during Chapter 11

Character.AI is not shutting down as of November 6, 2026. The app and website are running, and the company said on October 12 that the platform "remains up and running." But its parent company is in Chapter 11 bankruptcy, and the company has said it will wind the platform down if no viable bid comes in. So the honest answer to "is Character.AI shutting down" is: not now, and the sale process that decides it ends in early December. The company's November 5 update has the latest dates.

Is Character.AI still running?

Yes. In its October 12 post, Character.AI said users can still access all services for now. Paid subscriptions stay active and billing is unchanged. The company said it will notify subscribers in advance if changes affect paid features.

The November 5 post is a legal notice about the sale. It does not say whether the app will continue after the sale, and it does not announce a shutdown. We found no announcement of a shutdown date in either post.

What Chapter 11 means here

Character Technologies, Inc., the company behind Character.AI, filed a voluntary Chapter 11 petition on October 12, 2026, in the U.S. Bankruptcy Court for the District of Delaware (Case No. 26-11603). Chapter 11 is a court-supervised process. A company in Chapter 11 can keep operating while it reorganizes or sells its assets. It is not the same as liquidation.

Here the company chose a sale. It asked the court to let it sell, license or otherwise dispose of all or substantially all of its assets under section 363 of the Bankruptcy Code. The company said in October that it hoped the sale would produce a proposal that lets the platform keep operating.

Who is bidding

Disney Worldwide Services, Inc. is the "stalking horse" bidder. That is the first bidder, whose agreement sets a floor that others must beat. Its Stalking Horse Transaction Agreement is dated October 13, 2026, and covers what the filings call the "Disney Target Assets." Other bidders can offer more. The notice also says other stalking horse buyers may be named for assets that are not part of the Disney deal.

The notice lists two earlier Disney agreements, both dated September 18, 2026: a Transition Services Agreement and an Exclusivity and Prepayment Agreement. The company's posts do not say what the Disney deal is worth.

Key dates

The Bankruptcy Court approved bidding procedures on November 4, 2026. All times below are Eastern, from the company's notice.

Objections to how the auction ran, to the winning bidder or to changed agreements are due at the sale hearing. The company said in October that it expected the sale to finish in late November or early December. The court dates put the approval hearing on December 3 and 4. Case documents are on the claims agent's site, cases.stretto.com/chartech.

What this means for users

Nothing changes today. The company's October post says the Privacy Policy still applies and data practices are unchanged. Users can delete their account or export their data from the app or website. Anyone who cares about their chats and characters could do that before the auction, though nothing in the notices says a shutdown is coming.

The outcome depends on who wins the auction and what they buy. If a buyer takes the platform, the service can continue under new ownership. If no viable bid arrives, the company said the platform would be wound down, and it gave no timeline for that.

What to watch

The bid deadline on November 24 and the auction on December 1. The sale hearing on December 3 and 4 is where the court decides. The company's blog and the Stretto case page are the places to check.