Character.AI files for bankruptcy; Disney bids $20 million for IP

Character.AI voluntarily filed for Chapter 11 bankruptcy in Delaware on October 12 to facilitate a court-supervised sale of its assets, with the platform set to wind down if no buyer keeps it running. Disney Worldwide Services is the opening bidder, offering $20 million for a non-exclusive, perpetual license to some of Character.AI's intellectual property and legal claims, alongside transition services from former employees. The company estimated its assets and liabilities between $50 million and $100 million in its petition, and the sale is expected to close in late November or early December.