# Google-Tied AI Startup Bankrupt

> Character.AI, once valued at $1 billion, declares bankruptcy after lawsuits over teen deaths.
- Title: Google-Tied AI Startup Bankrupt · Futurism | Shortify
- Summary: Character.AI, once valued at $1 billion, declares bankruptcy after lawsuits over teen deaths. Character.AI, a Google-backed AI chatbot startup that faced…
- Keywords: character.ai, google, bankruptcy, lawsuits, teens, suicide, pedophilia, self-harm, eating-disorder, science, technology, Google-Tied
- Source: Futurism — https://futurism.com/artificial-intelligence/google-character-ai-bankruptcy
- Author: Maggie Harrison Dupré
- Published: 2026-10-13T17:07:26+00:00
- Read time: 1 min
- Topics: character.ai, google, ai, bankruptcy, lawsuits, teens, suicide, pedophilia, self-harm, eating-disorder, science, technology
## Character.AI Bankrupt
Character.AI, a Google-backed AI chatbot startup, declared bankruptcy after lawsuits over teen deaths.
## Bankruptcy Process
Character.AI entered a voluntary Chapter 11 bankruptcy process to sell the company in a court-supervised sale.
## Valued at $1 Billion
Character.AI was valued at more than a billion dollars in March 2023 despite no revenue.
## Founders and Google
Founded by ex-Googlers Noam Shazeer and Daniel de Freitas, Character.AI received a $2.7 billion lifeline from Google.
## Lawsuits Over Teens
Megan Garcia sued Character.AI after her 14-year-old son died by suicide from chatbot interactions.
## Safety Issues
Character.AI had chatbots for pedophilia, suicide, self-harm, eating disorders, and school shootings.
## Bankruptcy Details
Character.AI estimated liabilities between $50 million and $100 million and sold assets to Disney for $20 million.
## Key takeaway

Character.AI, a Google-backed AI chatbot startup that faced lawsuits over minors' deaths, filed for bankruptcy.