Character.AI Files for Chapter 11, Names Disney as $20 Million Lead Bidder
publishers 27articles 27first reported 13 Oct, 04:22 UTCdeveloping since 13 Oct · 10 editions
Character.AI filed for Chapter 11 bankruptcy protection in the United States on Monday and began a court-supervised process to sell all or substantially all of its assets.
Disney Worldwide Services, an affiliate of Walt Disney, has agreed to serve as the stalking horse bidder with a $20 million offer for certain assets. The proposed transaction also includes a nonexclusive license to unspecified intellectual property and transition support involving former Character.AI employees now at Disney. Disney’s offer will establish a baseline, while other bidders may submit higher proposals under auction rules that require court approval.
Character Technologies, the company behind the generative AI chatbot platform, estimated both its assets and liabilities at between $50 million and $100 million in a court filing. The company cited legal, regulatory and operational pressures in explaining its decision. Character.AI has faced lawsuits and government scrutiny over chatbot safety, while Disney previously challenged unauthorized bots based on its characters.
The company expects the sale process to conclude in late November or early December 2026. Its platform remains operational, and paid subscriptions and billing are continuing unchanged for now. Character.AI said it hopes the process produces an offer that permits the service to continue, but warned that the platform will be wound down if no suitable buyer emerges.
HOW THIS STORY WAS MADE
Written from 8 articles, 4 with the publisher's own text; 8 independent newsrooms once syndicated copies count as one; this version written 12 h after the record first saw the story; the editor kept it as written.
- Publishers
- 27
- Source articles
- 27
- Given to the writer
- 8, 4 with the article's own text
- Independent newsrooms
- 8
- This version written
- 12 h after the record first saw the story
- Second model (editor)
- kept as written
- Publication gate
- passed
- Human review
- none
WHAT THE EDITOR DID
The second model checked the writer's draft against the same sources and published it as written.
Written by a language model from the sources above, then checked by a second model that may only cut, attribute or correct. How it works →