Disney to hire majority of Character.AI staff in $20M bankruptcy deal

Disney has agreed to acquire certain assets of AI chatbot startup Character.AI for $20 million and extend job offers to at least 60 employees — the majority of its workforce — according to a bankruptcy court filing reviewed by Bloomberg. The filing says the offered annual compensation totals about $60 million and that the vast majority of employees who received offers have accepted.

Character.AI filed for bankruptcy in mid-October. Disney's bid is structured as a stalking horse, meaning other companies can still submit higher offers in the bankruptcy process.

The filing also cites high operating costs, potential litigation-related liabilities and regulatory engagement as factors that hobbled the company despite its large and engaged user base. The startup previously faced lawsuits and government investigations over child safety concerns.

The company's former CEO, Karandeep Anand, recently became Disney's first CTO, adding a further tie between the two companies.