Disney Bids $20 Million for Character.AI Tech Amid Bankruptcy
AI-generated image · US National Wire
The entertainment giant seeks a license for chatbot intellectual property despite previously accusing the company of harming children.
Disney has offered $20 million for a "non-exclusive perpetual license" of certain intellectual property from Character Technologies, the maker of the chatbot Character.AI, as Ars Technica first reported. The bid comes as Character Technologies undergoes bankruptcy proceedings, with the company reporting estimated assets and liabilities between $50 million and $100 million, according to NBC News.
The move marks a sharp pivot for Disney. Axios reported that in September 2025, Disney sent a cease-and-desist letter to Character Technologies, accusing the chatbot maker of weaponizing Disney characters in ways that were "sexually exploitive" and "dangerous to children," which Disney claimed damaged its reputation and goodwill. Deadline reported that Disney has since appointed former Character.AI leader Karandeep Anand to serve as its first chief technology officer.
Character.AI has faced severe legal challenges, including settling a lawsuit alleging its chatbots encouraged 14-year-old Sewell Setzer III to commit suicide. Additionally, Pennsylvania has alleged the bots illegally posed as licensed doctors, and Kentucky claims they encouraged self-harm, Ars Technica reported.
Deadline reported that Disney is seeking ways to profit from the AI boom after a partnership with OpenAI fell through following the shutdown of Sora. Character Technologies' bankruptcy filing notes the platform has a large user base, with a company blog stating it reached over 20 million monthly active users last year. While Disney's bid is for specific technology, the company's press release noted the possibility of a transition managed by Character.AI employees. The sale is expected to conclude by late November or early December 2026.