GoKawiilCharacter.AI files for Chapter 11, agrees to sell assets to Disney for $20 million
Character.AI has filed for Chapter 11 bankruptcy protection in the US, listing estimated liabilities between $50 million and $100 million, and is proceeding with a sale of its assets. Disney will act as lead bidder, paying $20 million for unspecified assets, gaining a nonexclusive IP license, and receiving transition support from former Character.AI staff it has already hired, including ex-CEO Karandeep Anand.
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The filing marks a steep fall for one of the earliest breakout generative AI chatbot companies, which had drawn billions in interest but also faced lawsuits and regulatory scrutiny over chatbot safety. Disney's involvement suggests the entertainment giant is moving to both expand its AI capabilities and control how its characters and IP are used in chatbot form, after previously sending cease-and-desist letters over unauthorized character bots. The bankruptcy sale process could still attract competing bidders, meaning the final outcome for Character.AI's assets remains unsettled.
- Character.AI filed for Chapter 11 bankruptcy with liabilities estimated at $50-100 million.
- Disney is the lead bidder, offering $20 million for select assets plus a nonexclusive IP license.
- Former Character.AI CEO Karandeep Anand has already joined Disney as chief technology officer.
Source: theverge.com — Robert Hart, 2026-10-13
Published there as: “Character.AI files for bankruptcy”
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