Disney finds a deal path to buy Character.AI while sidestepping its lawsuits

Disney found a way to buy Character.AI without buying its lawsuits

If the deal closes and a court approves it, Disney would get Character.AI's staff and most of its tech stack while avoiding the legal problems still hanging over the company. Character.AI sought a buyer or investor in August 2025 and was told lawsuits and regulatory risk made it hard to sell. When it filed for bankruptcy, investigations already covered 46 states and territories.

Why it matters: Disney would take Character.AI's team and tech stack through a bankruptcy deal and skip the ongoing lawsuits, and states have reserved the right to challenge the plan.