Disney to hire most of Character.AI's staff post-bankruptcy
Original: Disney agrees to hire the majority of Character.AI’s workforce
Why This Matters
A major AI chatbot's collapse shows legal liability can outweigh user scale.
After Character.AI filed for bankruptcy, Disney agreed to offer jobs to at least 60 employees—the majority of the startup's workforce—at an estimated $60M annual compensation, per a Bloomberg-spotted legal filing.
Character.AI filed for bankruptcy earlier this week, and Disney has stepped in as the primary acquirer of both assets and talent. A legal filing revealed Disney agreed to offer positions to at least 60 of Character.AI's employees—the bulk of its workforce—at an estimated $60 million in combined annual compensation. The filing notes the "vast majority" of those offered jobs accepted.
The deal builds on existing ties: Character.AI's former CEO Karandeep Anand recently became Disney's first-ever CTO, and Disney had already agreed to acquire some of the startup's assets for $20 million. However, this arrangement is structured as a stalking horse bid, meaning competing offers could still emerge and displace Disney's terms.
The filing points to two factors that sank Character.AI despite its "large and engaged user base": high operating costs and mounting legal exposure. The company faces a lawsuit from the mother of a 14-year-old boy who died by suicide after allegedly becoming obsessed with one of its chatbots. It also faces government investigations into child safety practices.