Character AI Review 2026: Features, Pricing and Teen Rules as It Enters Bankruptcy

Character AI, the chatbot platform where users talk to millions of user-made AI characters, filed for Chapter 11 bankruptcy on October 12, 2026. The service is still online, and paid plans still work, according to CBS News. But its future now depends on a court-supervised sale due to close in late November or early December.

That changes how anyone should judge the product. Character AI remains the largest library of roleplay characters around, with a capable free tier and a cheap $9.99 c.ai+ plan. It is also a platform that has added ads, swipe limits and selfie age checks this year, removed open-ended chat for under-18s, and may not survive in its current form.

We reviewed Character AI as it stands in late October 2026, drawing on court reporting, the company's announcements as covered by the press, independent tests and user feedback. Nobody at The AI Future ran hands-on tests for this review.

Our take: Character AI is still a fun, low-cost way for adults to chat with fictional characters. It is not a safe place to invest years of chats right now. Export anything you care about.

What is Character AI?

Character AI (often written c.ai or Character.ai) is a consumer chatbot service run by Character Technologies. Users create AI characters with a personality, backstory and greeting, then chat with them by text or voice. Other users can find and talk to those characters too.

Former Google engineers Noam Shazeer and Daniel de Freitas founded it in November 2021, according to Wikipedia. A $150 million round in March 2023 valued it at about $1 billion. In August 2024 Google signed a licensing deal reported at $2.7 billion, and both founders returned to Google, per PPC Land and BetaNews.

The audience is large. A court footnote puts current and past users at about 163 million, and Pennsylvania's May 2026 lawsuit cited more than 20 million monthly active users, PPC Land reports. Active users spend an average of two hours a day with the chatbots, according to Reuters, via The Star.

The bankruptcy, in brief

Character Technologies filed in the U.S. Bankruptcy Court for the District of Delaware, case 26-11603. It estimates assets and liabilities at $50 million to $100 million each, per BetaNews. CEO Colin Adams cited "significant legal, regulatory and operational headwinds," CBS News reports.

Disney is the stalking-horse bidder. It offered $20 million for a non-exclusive, perpetual license to certain intellectual property, and agreed to hire most staff, according to Reuters. Former CEO Karandeep Anand became Disney's first chief technology officer in September, Forbes reports. Disney's attorney said it is not interested in user data. Reuters reported the company was losing $8 million to $9 million a month before filing.

Other bidders can still top Disney's offer. If no buyer keeps the chatbot running, the company has said it could wind the platform down, per Tom's Guide.

Key features

A huge character library

The core product is still the catalogue. Reviewers cite more than 10 million user-created characters across anime, games, history, fiction and "helper" bots, according to eesel AI and StartupHub.ai. Character creation and publishing are free. That depth is the main reason people search for "chat with AI characters" and land here.

PipSqueak 2 and DeepSqueak models

Character AI cut its model lineup sharply this spring. PipSqueak 2 began rolling out in April after a CEO announcement on April 14, RoboRhythms reports. Older chat styles, including Roar, Meow, Soft Launch, Goro and Dynamic, were retired between April 28 and May 8, per a second RoboRhythms report.

Free users now get PipSqueak 2 as the default. DeepSqueak, the premium model, is for c.ai+ subscribers. A RoboRhythms comparison found DeepSqueak better for long, descriptive roleplay, with PipSqueak 2 shorter and more dialogue-driven. Many long-time users still miss the retired models, which is a big part of the "old Character AI" nostalgia online.

Lorebook and memory

Lorebook lets creators attach world knowledge, such as locations and backstories, to a character so it carries into every chat. It arrived for c.ai+ first in April, with wider access planned, according to AI Companion Pick. The same source says memory upgrades in April improved recall across conversations. Free users get basic memory and up to five Pinned Memories per chat, per eesel AI.

Voice calls

Character Calls allow two-way voice conversations with a character, with tap-to-interrupt and saved transcripts, AI Companion Pick reports. Free voice calls may be throttled. c.ai+ removes the cap.

Stories, Imagine and c.ai labs

Character AI has pushed beyond plain chat. Stories offers branching, choose-your-path fiction with two or three characters, a genre and a premise. Imagine Gallery, launched in March, collects images generated from chats. A c.ai labs space opened in February with experiments such as Streams, Comics and Interactive Podcasts, according to AI Companion Pick. In July the company launched c.ai Series, a line of generative-AI microdramas, per Wikipedia.

Safety and age policies for teens

Character AI no longer offers open-ended chat to users under 18. The company announced the change on October 29, 2025, and it took effect on November 25, 2025, according to Fortune. During the transition, teen chat time was capped at two hours a day and then reduced. The company also said it would fund an independent nonprofit, the AI Safety Lab, MediaNama reported.

Teens can still use Stories, which the company describes as "a guided way to create and explore fiction, in lieu of open-ended chat," per MediaNama. Fortune reported that videos and streams remain available too.

Age assurance applies to every account. Character AI's own model first estimates age from signals such as login details and activity. If it is not confident a user is an adult, the account is sent to Persona, a third-party provider, for a selfie age estimate and, if needed, a government ID check, according to All About Cookies. Persona deletes the selfie and ID data within seven days, the same source says. Flagged accounts are locked in read-only mode until verified, and RoboRhythms reports adults being misflagged and waiting days for support.

Parental tools are thin. Parental Insights lets an invited parent see time spent on the app, but offers no meaningful controls, according to Protect Young Eyes. The U.S. App Store now lists the app as 18+, per its App Store page.

The policy shift followed lawsuits and regulatory pressure. In January 2026, Character AI and Google agreed to settle five family lawsuits, including Megan Garcia's wrongful-death suit over her 14-year-old son, per BetaNews. Kentucky's attorney general alleged in January that the chatbots "preyed on children and led them into self-harm," and Pennsylvania sued in May over a bot that claimed to be a licensed psychiatrist, CBS News reports. In bankruptcy court on October 14, a group of 40 state attorneys general asked the judge to protect young users' data in any sale, according to Reuters.

Pricing and plans

Prices were checked in October 2026. Character AI has one subscription, c.ai+, plus optional Charms purchases.

Plan details come from eesel AI, last updated in June 2026, and the U.S. App Store listing, checked this month. The App Store also lists a "Character.AI Lite" purchase at $4.99 and $2.49, but we could not confirm what it includes.

So is Character AI free? Mostly, yes. Messaging is unlimited on the free plan. But ads arrived in conversations in March 2026, along with daily swipe limits, according to RoboRhythms. User reports put the cap at 400 swipes a day in some regions, though the company has not published the figure. eesel AI notes that many c.ai+ perks show up only in the app, so web users see a smaller gap.

The bankruptcy adds a caveat. Billing continues as normal, and the company says subscribers will get advance notice before paid features change, per Tom's Guide. Tech Insider found no mention of refunds. An annual plan is a riskier buy than a monthly one right now.

Performance and independent testing

Independent testing paints a mixed picture. In RoboRhythms' side-by-side test, DeepSqueak held tone over hours of roleplay and kept voices distinct in group scenes. PipSqueak 2 began drifting around message 80 and blended minor characters together. DeepSqueak could loop or repeat itself during peak U.S. evening hours.

Early PipSqueak 2 users reported run-on sentences near the end of long replies, RoboRhythms said in April. A comparison by Tech Insider found Character AI's memory resets more often between characters than Nomi's, making it less consistent for long-term companionship. Tech Insider also cited a Companion Scout score of 69 out of 100, behind Nomi (87) and Replika (71).

Filtering is a recurring issue. Character AI bans explicit sexual content for all users, per Tech Insider. Users on Trustpilot report over-filtering of mild action words, broken roleplay and poor memory, as covered in the user sentiment section on this page.

Privacy deserves attention given the sale. The privacy policy allows user data, including chat transcripts and voice recordings, to be disclosed in connection with a sale, CBS News reports. Data exports took three to four weeks in October, and download links expire after seven days, according to Tech Insider. Deleting an account may not erase all data, Straight Arrow News notes.

Who it's for

• Adult roleplay and fan-fiction fans who want variety more than depth. No rival matches the size of the character library.
• Casual users who want free AI character chat and can tolerate ads and limits.
• Creators who enjoy building and sharing characters, especially with Lorebook on c.ai+.

It is not for under-18s, who can no longer chat freely. It is also a poor fit for anyone unwilling to complete a selfie or ID check, or anyone who needs long-term memory and stability. And given the bankruptcy, nobody should treat it as a permanent home for important chats.

Character AI alternatives

Nomi AI is the pick for long-term companionship. Reviewers rate its memory highest, and Premium costs $15.99 a month, per Tech Insider.

Replika suits users who want one consistent companion rather than a library. Pro costs $19.99 a month or $69.99 a year, Tech Insider reports.

Claude or ChatGPT work well for writing-focused roleplay and collaborative fiction with stronger general reasoning, though neither offers a character marketplace. See our Claude review and ChatGPT review, plus our guide to writing better prompts for setting up a character.

Verdict

Character AI still does one thing better than anyone: it lets you find and chat with almost any character imaginable, for free. The c.ai+ plan is cheap, and DeepSqueak is a solid roleplay model.

But 2026 has been rough. Ads, swipe caps, retired models and mandatory age checks have soured many long-time users. The teen ban was a reasonable safety step, yet parental tools remain thin. And the Chapter 11 sale leaves the service, and users' data, in limbo.

What happens next: the court-supervised sale is due to finish by late November or early December. Adults can keep using the free tier. Hold off on an annual plan, and export your chats now.

FAQ

What is Character AI?

Character AI is a chatbot platform where users create and talk to AI characters by text or voice. It was founded in 2021 by former Google engineers and has about 163 million current and past users, according to court filings reported by PPC Land.

Is Character AI free?

Yes. The free plan includes unlimited messaging and the full library, but has ads, a daily swipe cap and peak-hour queues. c.ai+ costs $9.99 a month or $94.99 a year.

Is Character AI shutting down?

Not yet. It filed for Chapter 11 on October 12, 2026, and remains online during a sale due by late November or early December. The company has said it could wind down if no buyer emerges.

Can teenagers use Character AI?

Under-18 users lost open-ended chat on November 25, 2025. They can still use Stories and some creative features. Age is checked by an in-house model and, if needed, a Persona selfie or ID check.

What is "old Character AI"?

Users use the phrase for the platform before 2026's changes, when there were no in-chat ads or swipe caps and models such as Roar and Soft Launch were available. Most of those models were retired in spring 2026.