This is an unusually broad indemnification clause — you could be held responsible for legal fees and losses arising from your interactions with the AI, even if the outcome was partly caused by the service itself.
Character.AI claims a perpetual, irrevocable, royalty-free license to use everything you submit or generate on the platform — including your conversations — for commercial and promotional purposes. If anything goes wrong, the company's liability to you is capped at just $100 or whatever you paid them. You can opt out of the mandatory arbitration clause by emailing legal@character.ai within 30 days of agreeing to the Terms.