Character.AI Files for Chapter 11 Bankruptcy and Agrees $20M Asset Sale to Disney
aiinsider ·
Character.AI has filed for Chapter 11 bankruptcy protection after five years of operation, citing assets and liabilities ranging between $50 million and $100 million. The company has agreed to sell certain assets to Disney for $20 million, which includes a non-exclusive perpetual license to its technology. Disney will provide transition services using former Character.AI staff, including ex-CEO Karandeep Singh Anand, who joined the media giant last month. CEO Colin Adams stated that the board chose this court-supervised sale to maximize value amid significant legal and regulatory challenges. The platform is expected to continue operating during the process, which should conclude in late November or early December. However, Adams noted that no other buyer has emerged, and the service will be wound down if a viable bid does not materialize. Founded by former Google engineers in 2021, the startup previously reached unicorn status and attracted over $193 million in funding before facing lawsuits and safety investigations.
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