Disney Bids on Character.ai Assets as Chatbot Provider Files for Chapter 11 Bankruptcy

Character.ai, the Menlo Park chatbot platform, filed for Chapter 11 bankruptcy on Monday due to high operating costs and legal challenges, including lawsuits regarding user harm. Following the recent hiring of the Character.ai CEO as chief technology officer, Disney Worldwide Services has reached an agreement to purchase specific intellectual property for $20 million. This deal includes transition services intended to help Character.ai maintain operations while Disney acquires assets from the controversial AI startup.