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

Summary

Character.AI, the chatbot startup founded by former Google researchers, has filed for Chapter 11 bankruptcy in Delaware to pursue a court-supervised sale of all or substantially all of its assets, a process expected to finish by late November or early December while the platform stays online, Business Insider reported. Disney Worldwide Services, an affiliate of the Walt Disney Company, is the opening bidder for a non-exclusive, perpetual license to certain Character.AI intellectual property and claims, offering $20 million, though other potential buyers can still make higher bids, according to Business Insider, while The Verge said the company is selling some of its assets to Disney. Chief executive Colin Adams said the company had taken steps to 'sustain and improve' the business amid 'significant legal, regulatory, and operational headwinds', and the platform, which has faced lawsuits over child safety, could be wound down if a sale fails, Business Insider reported.

Latest: Character.AI filed for Chapter 11 bankruptcy to pursue a court-supervised sale, with Disney offering $20 million as the opening bidder for a license to certain assets, Business Insider reported.

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