Reuters reports Character.AI agreed to sell some of its assets for $20 million.
Reuters reports that Character.AI filed for bankruptcy and agreed to sell some of its assets for $20 million.
420.5K
13 Sources, first seen ago
Character.AI has entered voluntary Chapter 11 proceedings to pursue a court-supervised sale of the company. In its announcement, the chatbot platform said its board chose bankruptcy after confronting “significant legal, regulatory, and operational headwinds.”
The service remains online, paid subscriptions are still active and billing is unchanged for now. Character.AI said it intends to give subscribers advance notice if the process affects paid features.
Reuters reports that Disney will serve as the stalking-horse bidder, setting a $20 million opening offer for a non-exclusive, perpetual license to certain Character.AI intellectual property. Other bidders may submit higher offers through the bankruptcy process, so Disney’s proposal is not a completed sale.
Character Technologies, Character.AI’s US-based owner, listed estimated assets and liabilities of $50 million to $100 million, according to the court filing cited by Reuters. Disney is also expected to support the transition with former Character.AI employees it has hired.
Character.AI expects the sale process to conclude by the end of November or early December 2026. The company said it hopes to find a proposal that supports continued operations, but it will wind down the platform if no workable bid emerges.
The filing follows a period of legal scrutiny. Reuters reported that Character.AI and Google settled a lawsuit earlier in 2026 over allegations involving a teenager’s death, while Kentucky and Pennsylvania filed separate cases making claims about harmful chatbot interactions. Disney also sent Character.AI a cease-and-desist letter in 2025 over unauthorized use of its copyrighted characters; Character.AI said it removed them.
—
Not ranked yet
—
Not ranked yet
