Character.AI files for bankruptcy, to sell some assets to Disney for $20 million

Character.AI, a generative AI chatbot platform, has filed for bankruptcy in the US and agreed to sell some assets to Walt Disney for $20 million. The company faces multiple lawsuits, including one from the mother of a 14-year-old Florida boy who died by suicide after allegedly being encouraged by a Character.AI chatbot, as well as suits from Kentucky and Pennsylvania over harmful chatbot interactions. Disney is positioned as a "stalking-horse" bidder for a non-exclusive perpetual license to some intellectual property, with other bidders allowed to outbid. Character.AI expects to close the sale of all assets by late November or early December. Its US-based owner, Character Technologies, listed estimated assets and liabilities between $50 million and $100 million. Disney will assist with the transition using staff hired from Character.AI. The platform's services will continue but could shut down if no buyer is found. Founded in 2021 by two former Google employees, Character.AI licensed its technology to Google in 2024, which rehired the founders. In September 2025, Disney sent a cease-and-desist letter over unauthorized use of its copyrighted characters, which Character.AI said it removed.

(Source：NBC News)