According to an order of dismissal in one of the cases, the overall settlement was approved by a California probate court in July, and the court tasked a referee to hear out all the issues pertaining to each individual settlement. On October 11, a day before Character.AI declared bankruptcy, the referee approved each settlement.
The Tech Justice Law Project and Social Media Victims Law Center, which represented plaintiffs in many of the lawsuits, declined to comment.
Despite losing key staff after the Google transaction and, according to the current CEO, struggled with profitability “at all times,” Character.AI continued to develop AI tools, including “real-time audio-driven FaceTime-style video generation with fictional…