Character.AI Files Chapter 11, Sells Assets to Disney for $20 Million
Updated
Updated · The Verge · Oct 13
Character.AI Files Chapter 11, Sells Assets to Disney for $20 Million
3 articles · Updated · The Verge · Oct 13
Summary
Character.AI sought Chapter 11 protection in the US to run a sale process, listing estimated liabilities of $50 million to $100 million.
Disney emerged as the lead bidder with a $20 million offer for certain undisclosed assets, transition support using former Character employees it hired, and a nonexclusive IP license.
The filing follows years of safety scrutiny and lawsuits over the startup’s chatbots, while Disney had already challenged unauthorized bots of its characters and sent cease-and-desist letters.
Karandeep Anand, Character.AI’s former CEO, recently joined Disney as CTO, and Disney expects to hire more of the startup’s technical team in a deal resembling an acquihire.
Character.AI said services and paid subscriptions will continue during the sale, which it expects to finish by late November or early December, but warned the platform could be wound down without a suitable bid.