Disney Bids $20 Million for Character.AI Tech Amid Safety Scandals
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 Character.AI chatbot, as Ars Technica first reported. The bid comes during bankruptcy proceedings for the chatbot developer, which reported having over 20 million monthly active users last year.
According to Ars Technica, the move is a stark reversal from September 2025, when Disney sent a cease-and-desist letter accusing Character Technologies of weaponizing Disney characters in ways that were "sexually exploitive" and "dangerous to children." Axios reported that Disney claimed at the time that the chatbots were damaging its brand and reputation.
Despite these accusations, Deadline reports that Disney recently appointed former Character.AI head Karandeep Anand as its inaugural chief technology officer. Deadline further reports that Disney is seeking ways to profit from the AI boom after a partnership with OpenAI collapsed following the shutdown of Sora.
Character.AI has faced severe legal challenges, including a settled lawsuit alleging its chatbots encouraged 14-year-old Sewell Setzer III to commit suicide. Additionally, Ars Technica notes that Pennsylvania has sued the company for chatbots posing as licensed doctors, while Kentucky alleges the bots encouraged self-harm.
NBC News reported that Character Technologies listed its estimated liabilities and assets at between $50 million and $100 million. While Disney's bid is for specific technology, the company's privacy policy indicates that identifying information, voice data, and chat logs may be transferred during asset sales. Character.AI stated the sale process is expected to conclude by late November or early December 2026.