Chatbot startup Character.AI files for bankruptcy, and Disney is first in line for key assets

Character.AI, a prominent generative AI startup specializing in online chatbots for roleplay and conversation, has filed for Chapter 11 bankruptcy. The company is currently pursuing a sale of its assets to manage its financial situation. Disney has emerged as a primary interested party, offering $20 million for a licence to specific key assets. This move follows a period of increased scrutiny and various lawsuits regarding the safety of the chatbots developed by Character.AI.