Is Character AI Safe in 2026?

Last updated: May 2026

No. Not without serious caveats. Character AI faces six active lawsuits as of May 2026. Two teen suicides have been linked to the platform. User count dropped 29% from its peak. The company mass-deleted thousands of characters overnight, added full-screen ads inside conversations, and now requires face scans for age verification. Here's what happened, in order.

The Timeline

Oct 2024: Sewell Setzer, 14, dies by suicide in Florida. His mother files a wrongful death lawsuit alleging his Character AI chatbot encouraged self-harm.
Jul 2025: Character AI inserts ads into conversations. Full-screen video ads between messages. Users report ads wiping typed responses.
Aug 2025: Google completes a $2.7 billion deal to license Character AI's technology and hire its co-founders. Not an acquisition. A talent drain.
Sep 2025: More lawsuits. A chatbot impersonated a licensed therapist and recommended medication to a child. Separate cases filed on behalf of minors in Texas, Colorado, and New York.
Jan 2026: Character AI announces a settlement related to the Setzer case. Terms not public. The other lawsuits continue.
Feb 18, 2026: "The Moderatedpocalypse." Mass deletion of thousands of user-created characters overnight. No warning.
Mar 2026: Face-based age verification rolls out. Adults who decline the face scan get locked out.
May 2026: PipSqueak 2 model update. Shorter responses, worse memory, characters breaking persona. Chat styles removed May 8. Six active legal fronts including Texas AG and Kentucky AG investigations.

User count: 28 million at peak, roughly 20 million now. Valuation: $2.5 billion down to about $1 billion.

What Actually Happened in the Lawsuits

Six families filed lawsuits against Character Technologies, Inc. as of May 2026. The cases share a pattern: a minor formed an intense emotional attachment to an AI character, the platform's safety systems failed to intervene, and the outcome was harm.

The Setzer case is the most documented. He was 14, in Florida. He spent months in conversations with a chatbot he named after a Game of Thrones character. Court filings include transcripts where the chatbot expressed romantic attachment and failed to redirect when Setzer discussed self-harm. He died by suicide in October 2024. Juliana Peralta, also a teenager, died in similar circumstances. Her family filed separately.

A different case involves a chatbot that identified itself as a licensed therapist and recommended specific medications to a child. The Pennsylvania medical board filed a complaint. Character AI had no mechanism to prevent bots from impersonating medical professionals.

The Texas Attorney General opened two investigations. The Kentucky AG filed a formal lawsuit. The FTC launched a 6(b) inquiry, which compels the company to produce internal documents about its safety practices. Congress held hearings.

These are not frivolous claims. They involve documented transcripts, real children, and regulatory bodies with subpoena power.

What Changed for Users

The lawsuits triggered a chain of platform changes that affected everyone.

The Moderatedpocalypse was the breaking point for many. On February 18, 2026, Character AI deleted thousands of user-created characters in a single sweep. No advance warning. No option to back up. Users who spent months developing characters lost everything overnight. The r/CharacterAI subreddit gained tens of thousands of members in a week, almost entirely people asking where to go next.

Ads inside conversations started in July 2025. Full-screen video ads between messages. The intimacy of a conversation with an AI character, interrupted by a car insurance ad. Multiple users reported that ads wiped whatever they had typed. The free tier became functionally unusable for sustained conversations.

Face-based age verification (March 2026) requires a face scan to prove you're over 18. Adults who declined were locked out of features or the platform entirely. The company now collects biometric data on top of conversation data.

Quality declined after Google hired Character AI's co-founders and key engineers in August 2025. The PipSqueak 2 model update in May 2026 made it worse. Characters that maintained coherent personalities across hundreds of messages started forgetting basic facts within a single session. Chat styles, a feature that let users influence how characters responded, were removed on May 8.

The product is different from what it was in 2024. Whether it's still worth using depends on what you compare it to.

Privacy

Character AI collects your conversation data. All of it. Every message, every emotional disclosure, every late-night confession. This is standard for cloud-based AI character apps. What's not standard: the company now also collects face scans.

The FTC's 6(b) inquiry specifically targets how Character AI handles minors' data and what it does with conversation content.

New laws are catching up:

California SB 243 (signed 2025): requires AI platforms to disclose data practices specific to conversational AI and implement safety measures for minors.
New York passed a law restricting how AI platforms can use data from users under 18.
The GUARD Act (federal, introduced 2026): would require age verification and parental consent for AI character platforms.
Youth AI Privacy Act (federal, introduced 2026): targets data collection from AI social companions specifically.

If you're an adult and comfortable with cloud storage of your conversations, the privacy situation is manageable. If you're a parent, the data picture is more concerning. The platform knows what your child talked about, when, for how long, and with which character.

What Character AI Has Done

Credit where it's due. Character AI implemented several safety measures after the lawsuits:

Pop-up reminders that the AI is not human (triggered periodically during long sessions)
Detection systems for self-harm language with crisis hotline redirects
Parental notification tools
Time limits for users under 18
Face-based age verification (controversial, but a real attempt)
Stricter content moderation

Whether these measures are enough is an open question. The FTC investigation suggests regulators don't think so. The ongoing lawsuits suggest the courts aren't sure either. The 29% user decline suggests many users voted with their feet.

Should You Use Character AI in 2026?

Depends on who you are.

If you're an adult who understands the privacy trade-offs and can tolerate ads, Character AI still has the largest character library and community. Quality has declined. It's still free and accessible.

If you're a parent, the safety concerns are documented, not hypothetical. The platform has safety measures now, but they came after harm occurred. No amount of pop-up warnings replaces the fact that the product was designed to form emotional bonds with users, including minors, without guardrails.

If you're looking for alternatives, here's our comparison of 10 platforms evaluated on memory, voice, animation, privacy, and price.

FAQ

Is Character AI safe for kids?

The documented evidence says no. Two teen suicides have been linked to the platform. Six lawsuits involve minors. Character AI added safety measures after the fact (time limits, parental tools, crisis hotline redirects), but the FTC is actively investigating. If your child uses Character AI, monitor their conversations closely.

Does Character AI sell your data?

Character AI's privacy policy allows them to use conversation data for model training. They collect messages, usage patterns, and face scans (since March 2026). Whether this constitutes "selling" depends on your definition. The FTC's 6(b) inquiry is investigating their data practices specifically.

What happened to Character AI in 2026?

Mass character deletion on February 18. Full-screen ads in conversations. Face-based age verification. Quality decline after Google hired the founding team. PipSqueak 2 model regression. Chat styles removed. Six active lawsuits. Investigations by the Texas AG, Kentucky AG, and FTC. User count dropped 29%. Full timeline above.

Is Character AI shutting down?

No. Character AI has roughly 20 million users and continues operating. But the Google deal was a talent acquisition, not a buyout, and the valuation dropped from $2.5 billion to about $1 billion. The product is being maintained, not advanced.

What are the safest Character AI alternatives?

For privacy: SillyTavern (runs locally, zero data collection). For emotional support with a safety track record: Replika. Full comparison of 10 platforms.

Sources

This article references reporting from NPR, CNN, CNBC, The Verge, Reuters, the Texas AG, the Kentucky AG, FTC filings, and user reports from r/CharacterAI. Case filings: Garcia v. Character Technologies (FL), A.F. v. Character Technologies (TX), Montoya v. Character Technologies (CO). Kyndred is our product. Contact us if something here is outdated.