Disney offers $20 million for Character.AI technology license in bankruptcy sale

Character.AI has entered Chapter 11 bankruptcy proceedings and named Disney as the proposed opening bidder for some assets. The agreement includes $20 million for a permanent, nonexclusive license to selected intellectual property, along with certain company claims. It remains subject to competing offers and does not represent a completed acquisition of the chatbot business.

Disney would also provide temporary operational support through former Character.AI employees it has hired. Character.AI filed its case in Delaware and said its board chose a supervised sale after reviewing alternatives amid legal, regulatory and operating difficulties. The platform remains available, and existing subscriptions continue to be billed.

Character.AI expects the sale process to finish in late November or early December 2026. Its continued operation depends on securing a proposal that supports keeping the service running. The company said it would shut down the platform if no such purchase emerges.