Business · Companies · 3 hrs ago
Disney seeks Character.AI technology and hires most of its staff through bankruptcy deal
Character.AI filed for bankruptcy on October 12, as Disney arranged to hire most of its employees and seek rights to much of its technology.
The chatbot startup and Disney are based in the United States; Character.AI’s former CEO, Karandeep Anand, has become Disney’s first chief technology officer.
Court filings say Disney agreed to offer jobs to at least 60 employees, and most of those offered jobs accepted.
The deal could give Disney a perpetual, worldwide license to use Character.AI code and tools, including technology designed to support safety and predict users’ ages.
Character.AI faces lawsuits and investigations over chatbot safety, including concerns about harm to minors, and the bankruptcy process is intended to address claims and preserve the value of its assets.
The filings say Character.AI’s website and user data are not part of the proposed license.
The technology license will go to auction in the coming months, and Disney’s deal depends on it winning the bid and receiving court approval.
Disney has agreed to hire most of Character.AI’s staff and is seeking a license to use much of the startup’s technology through bankruptcy proceedings.
Character.AI filed for Chapter 11 bankruptcy on October 12, after facing lawsuits and regulatory investigations over chatbot safety.
The proposed license covers technology including Character.AI’s trust and safety moderation tools, training infrastructure and age-prediction technology.
Disney’s bid is subject to an auction, creditor selection and court approval.
Character.AI would retain responsibility for its ongoing legal and regulatory matters, according to Wired.
- Who
- Disney and Character.AI are parties to the deal. Disney has agreed to make job offers to at least 60 Character.AI employees.
- What
- Disney is seeking a perpetual, worldwide, nonexclusive license for much of Character.AI’s technology through bankruptcy proceedings.
- When
- Character.AI filed for Chapter 11 bankruptcy on October 12, 2026. Disney’s earlier transaction with the startup took place in September.
- Where
- Not stated
- Why
- Character.AI cited the goal of resolving personal injury claims and state investigations while maximizing value for shareholders. The filing also cited diminishing cash reserves and litigation and regulatory risks.
This story does not have two clearly opposing sides.
Disney paid Character.AI $5.5 million and a refundable $2 million deposit, hired most of its employees and agreed that some would help keep the startup operating for five months.
Character.AI filed a petition for Chapter 11 bankruptcy.
Character.AI’s proposed technology license is to be auctioned.
- Initial payment
- Disney paid Character.AI $5.5 million
- Refundable deposit
- $2 million
- Job offers
- At least 60 Character.AI employees
- Annual compensation
- Estimated $60 million
- Potential closing payment
- $12.5 million if Disney wins the auction and the deal is approved
- Bankruptcy filing
- October 12, 2026
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