Character.AI has filed for bankruptcy and plans to sell part of its assets to Disney for 20 million USD

According to a report by Reuters on October 12, the generative AI character dialogue platform Character.AI announced on Monday that it has filed for Chapter 11 bankruptcy protection in the United States and agreed to sell some assets to Walt Disney for $20 million.

The company has initiated a court-supervised asset sale process, which includes licensing some intellectual property, and is seeking court approval for auction rules, designating Disney as the lead bidder. Disney's bid will serve as the baseline offer, and other bidders may submit higher bids. The company expects the sale process to be completed in late November or early December 2026 and plans to continue operations during the process, including the Character.AI platform.

Character.AI CEO Colin Adams stated that the board determined, after a comprehensive assessment of options, that this court-supervised sale process is the most beneficial for maximizing value for all stakeholders. According to court documents, the platform's owner, the American company Character Technologies, has estimated assets and liabilities between $50 million and $100 million.