Character.AI Files for Chapter 11 as Disney Bids for Partial Assets

Character.AI filed for Chapter 11 bankruptcy protection on Oct. 12, while Disney submitted a $20 million initial bid for selected intellectual property rights rather than the entire platform. The bid covers a permanent, nonexclusive license and other assets. Disney has not committed to keeping Character.AI’s service running, leaving the platform’s future dependent on the bankruptcy sale. Character.AI was founded by Noam Shazeer and Daniel De Freitas, who later returned to Google after Google paid $2.7 billion for a nonexclusive license to the startup’s large-language-model technology in 2024.

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