Character.AI files for bankruptcy and sells assets to Disney
Summarised from 3 outlets · Updated 13 Oct, 13:32 · Archive
Character.AI, an AI chatbot platform, has filed for Chapter 11 bankruptcy and agreed to sell assets to Disney for $20 million.
Character.AI, one of the first major generative AI startups, has filed for Chapter 11 bankruptcy protection in the United States. The company, which allows users to create and have conversations with AI chatbots, has faced mounting scrutiny and lawsuits over chatbot safety, along with significant legal and regulatory challenges.
Disney has agreed to serve as the lead bidder for Character.AI's assets, paying $20 million for certain undisclosed assets and receiving a non-exclusive perpetual licence to its technology. Disney will also provide transition support using former Character.AI employees it has hired, including the company's former CEO Karandeep Singh Anand, who joined Disney last month as chief technology officer. In its bankruptcy filing, Character.AI listed estimated liabilities between $50 million and $100 million.
CEO Colin Adams said the company would continue operating during the sale process, which is expected to close in late November or early December. However, he acknowledged uncertainty about the outcome: 'We hope that the sale process will yield an actionable proposal that will allow continued operations of the Character.ai platform. If such a bid is unavailable, however, the platform will be wound down.' Disney has previously complained that Character.AI was damaging its brand and exploiting its intellectual property by allowing unauthorised chatbots of Disney characters.
How it is being reported
- Character.AI just filed for bankruptcy, and former foe Disney may buy it for partsCharacter.AI, a controversial generative AI startup that lets users create their own chatbot characters, has filed for Chapter 11 bankruptcyEngadget · 13 Oct, 14:45
- Just 5 years in, interactive chatbot platform Character.AI files for bankruptcyThe startup will sell some of its assets to Disney for $20 million.TechCrunch · 13 Oct, 13:23
- Character.AI files for bankruptcyCharacter.AI, one of the first breakout startups of the generative AI boom, has filed for bankruptcy and is selling some of its assets to Disney. The company, which builds various online bots for users to chat or roleplay with, has faced mounting scrutiny and lawsuits over the safety of its chatbots, but has continued releasing […]The Verge · 13 Oct, 11:32
In this story: Character.AI · Disney · Karandeep Singh Anand · Colin Adams · United States
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