Disney bids for Character.AI technology amid bankruptcy filing

Character.AI, an artificial intelligence platform for chatbot characters, filed for Chapter 11 bankruptcy on October 12. Disney has emerged as the opening bidder with an offer of approximately €17.2 million ($20 million) to acquire a non-exclusive, worldwide license for specific technologies and patents.

The deal focuses on acquiring talent rather than the platform itself. Disney has reached an agreement to hire at least 60 employees, with estimated annual salaries totaling roughly €51.6 million. The license specifically excludes user data, chat content, training data, and existing models. Consequently, the brand, the mobile application, and the user base will remain with the insolvent company.

If no buyer acquires the platform as a going concern, Character.AI faces shutdown. The company reported approximately 12 million monthly active users who spend an average of two hours per day on the platform. Google remains a major creditor following a previous deal in 2024 to license similar technology and hire the company's founders.