Disney to hire majority of bankrupt Character.AI's workforce

Summarised from 2 outlets · Updated 19 Oct, 10:19 · Archive

Disney has agreed to employ at least 60 of Character.AI's employees after the chatbot startup filed for bankruptcy, with the acquisition including $20 million in assets.

Character.AI, a chatbot startup, filed for bankruptcy this week. Disney has agreed to acquire some of its assets for $20 million and make employment offers to at least 60 of the company's employees — the majority of its workforce — at an estimated $60 million in annual compensation. A legal filing indicated that the vast majority of employees offered positions at Disney accepted them. Character.AI's former CEO Karandeep Anand recently became Disney's first chief technology officer.

Wired reports that Disney required the bankruptcy proceedings as part of structuring the deal, citing Character.AI's diminishing cash reserves and significant litigation and regulatory risks. The startup has faced multiple private lawsuits over the safety of its chatbots and investigations from regulators worldwide, including government inquiries into child safety concerns. The bankruptcy appears designed to reach a consensual resolution with personal injury claimants and investigating state authorities while preserving value for shareholders.

TechCrunch notes this is a stalking horse bid, meaning another company could come forward with a higher offer. Character.AI previously disclosed that despite having a large and engaged user base, the company struggled with high operational costs and potential litigation-related liabilities.

How it is being reported

• Disney Asked Character.AI to Go Bankrupt for a Get-Out-of-Lawsuits CardThe entertainment giant hopes to get trust and safety tech, among other IP, from a startup whose chatbots dozens of states allege encouraged minors to self-harm and kill their parents.Wired · 19 Oct, 10:00
• Disney agrees to hire the majority of Character.AI’s workforceAfter chatbot startup Character.AI filed for bankruptcy earlier this week, many of its employees will have the opportunity to take jobs at Disney. Character.AI’s former CEO Karandeep Anand recently became the entertainment giant’s first CTO, and the startup previously said that Disney had agreed to acquire some of its assets for $20 million. A legal […]TechCrunch · 18 Oct, 17:30

In this story: Disney · Character.AI · Karandeep Anand

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