Character.AI filed for Chapter 11 bankruptcy; Disney offered $20 million for a non-exclusive perpetual license to certain Character Technologies IP
Following·New·first covered 13 Oct 2026·2 sources
Disney Offers $20M for Character.AI IP During Bankruptcy
The gist
A major entertainment company is acquiring IP from a bankrupt AI chatbot firm it had publicly criticized for brand damage and harm to children. The non-exclusive perpetual license structure means Disney gains access to the technology without taking over the company.
The full picture
Character.AI has filed for Chapter 11 bankruptcy and agreed to sell certain assets to Disney for $20 million. Disney's offer is for a non-exclusive perpetual license to some of Character Technologies' intellectual property. The deal comes despite a prior conflict between the companies: Disney sent Character.AI a cease-and-desist letter in September 2025 accusing it of misusing Disney characters, and Disney had previously criticized Character.AI for harming kids and damaging its brand. Character.AI's press release did not specify which assets Disney sought to acquire.
How it developed
Sources
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