Disney Acquires Character.AI Staff and Technology Through Bankruptcy
Disney has acquired much of Character.AI's staff and technology through the AI company's bankruptcy proceedings, while sidestepping its legal liabilities.
AI chatbot platform Character.AI has filed for bankruptcy. Court filings indicate this decision is part of a deal allowing Disney to hire most of Character.AI’s staff, including former CEO Karandeep Anand, and potentially acquire most of its technology.
This move allows Disney to avoid the beleaguered startup's many legal liabilities and obligations. In recent years, Character.AI faced multiple private lawsuits over chatbot safety and investigations from global regulators.
According to Character.AI’s newly appointed CEO, the bankruptcy aimed to reach a "consensual resolution" with personal injury claimants and investigating states, while maximizing asset value for shareholders.
The Disney deal appears structured so that the remainder of Character.AI retains responsibility for ongoing legal battles, allowing Disney to gain technology and talent without inheriting the existing legal risks.