Disney has agreed to extend employment offers to at least 60 of Character.AI's roughly 86 full-time employees, according to a bankruptcy court filing reported on October 18. The filing describes estimated annual compensation for the roles at about $60 million combined and says the "vast majority" of staff who received offers have accepted them; other reporting on the same filing puts the headcount closer to 66.
Character.AI, the chatbot platform known for letting users converse with AI-generated personas, filed for Chapter 11 protection on October 13 in the U.S. Bankruptcy Court for the District of Delaware. Disney has separately agreed to serve as the "stalking horse" bidder for some of the company's assets, offering $20 million for a non-exclusive license to certain intellectual property, a starting bid that rival companies can still top before the bankruptcy sale closes, expected by late November or early December. The app itself, along with its brand, user data, chat logs, and trained models, remains part of the bankruptcy estate and is not included in Disney's bid.
The hiring move follows Disney's appointment of Character.AI's former chief executive, Karandeep Anand, as its first chief technology officer, reported in September. The bankruptcy filing cites heavy operating costs and a user base that engaged with the product without generating matching revenue, along with what it calls "potential litigation-related liabilities and regulatory engagement." Character.AI has faced wrongful-death litigation, including a lawsuit from a mother who said her teenage son's obsession with one of the platform's chatbots contributed to his suicide, as well as government inquiries into child-safety practices, including scrutiny from the Texas attorney general dating to 2024.
What's next
The bankruptcy court must still approve the sale process, and rival bidders have a window to top Disney's $20 million stalking-horse offer before the auction closes. It remains unclear what the absorbed employees will work on inside Disney, which has not detailed how it plans to use the talent beyond the hires themselves. For Character.AI's millions of registered users, the bankruptcy leaves the fate of the standalone app and its chat histories dependent on whoever ultimately wins the broader asset auction.