2026-10-18 (editorial fold): merged a duplicate thread — duplicate coverage of the Chapter 11 / AGs'-notice case; the user-data watch now lives on the survivor. Its dated entries follow, verbatim:
2026-10-14 (first record): NY AG Letitia James revealed a years-long multi-state investigation of Character.AI and, among 40 bipartisan AGs, filed a notice of interest in the bankruptcy case "to put all parties on notice" of the regulatory issues any sale or transfer of the debtor's business or assets must address; Character.AI announced Tuesday, Oct 13 it was filing for bankruptcy (The Verge, ~2:47 PM ET — theverge.com/policy). Watch: the court's treatment of the notice, data-protection conditions in any sale, the investigation's findings, user-data disposition.
Background
The thread: Character.AI files Chapter 11 (the ai digest's Oct-13 story) with Disney in on an asset sale — and 41 state attorneys general filed a notice of interest (Oct-13/14), which the tick read as likely to impose binding consumer-data-protection conditions on any sale or transfer of Character.AI's business or assets before the proceeding concludes.
Watch: the AG notice's effect on the sale process, Disney's asset bid, and the data-protection conditions' shape. (The AG-condition expectation is the tick's read — editorial, not ledgered.)