The inquiry began after a wrongful death suit filed in 2024 alleged that the chatbot fostered a sexually exploitative relationship with a child who later died by suicide. The states identified potential consumer protection and privacy violations. The attorneys general say they tried to resolve those concerns with the company before its bankruptcy filing, and no agreement was reached. The coalition has reserved the right to object to the sale, the bidding procedures, or any plan, and to request a consumer privacy ombudsman. No buyer or sale timeline has been identified in the materials reviewed. The investigation is ongoing.
The stakes are concrete. The coalition cites 2.1 million U.S. accounts belonging to users declared under 18, and it wants any buyer to honor user opt-outs. The states warn that a new owner could weaken or reverse existing protections. Attorneys advising clients on bankruptcy asset sales, data transfers, or consumer-facing AI products should track the Delaware docket for bidding procedures, objection deadlines, and any ombudsman appointment. The coalition has said it will stay engaged in the proceedings.