Character.AI files for bankruptcy protection, plans to sell some assets to Disney

Character.AI files for bankruptcy

Character.AI has filed for Chapter 11 bankruptcy protection in the US to push through a sale of the company and its assets, with Disney bidding $20 million for part of them. The filing lists estimated liabilities of $50 million to $100 million. Disney would be the lead bidder, setting the floor for other offers, and would get a non-exclusive license to some intellectual property.

Why it matters: Character.AI keeps paid subscriptions and other services running for now, but the platform closes if no suitable buyer emerges, so users' service depends on the sale.