Disney to hire majority of Character.AI employees following bankruptcy

Disney has reached an agreement to hire the majority of employees from Character.AI, a chatbot startup that recently filed for Chapter 11 bankruptcy protection. According to court filings, Disney intends to offer positions to at least 60 employees, representing most of the startup's remaining workforce. The deal includes an estimated $60 million in annual compensation for these workers, plus an additional $30 million in retention incentives, totaling approximately $180 million over three years.

In addition to the talent acquisition, Disney has agreed to pay $20 million for certain technological assets and intellectual property, including source code and patents. This arrangement serves as a “stalking horse bid,” meaning other companies may still submit higher offers during the bankruptcy process.

Character.AI, founded in 2021, faced significant financial strain due to high operational costs and legal challenges. These included lawsuits regarding child safety and the psychological impact of chatbots on minors. The transition follows the recent appointment of former Character.AI CEO Karandeep Anand as Disney’s first Chief Technology Officer, a move aimed at strengthening the entertainment giant's artificial intelligence capabilities.