The key facts

  • Disney will offer jobs to at least 60 Character.AI employees — most of the staff — with annual compensation of about $60 million
  • Disney is buying part of the startup's assets for $20 million; former Character.AI CEO Karandeep Anand became Disney's first CTO
  • The deal is a stalking horse bid: another company may offer more; Character.AI faced lawsuits and investigations over child safety

Disney to hire most of the Character.AI team

After the chatbot developer startup Character.AI filed for bankruptcy this week, many of its employees will get the opportunity to move to Disney. According to a court document flagged by Bloomberg, Disney has committed to making job offers to at least 60 Character.AI employees — most of the staff — with an estimated total annual compensation of about $60 million. The document also notes that the 'overwhelming majority' of employees who received offers accepted them.

Deal terms and its status

Former Character.AI CEO Karandeep Anand recently became Disney's first chief technology officer (CTO). The startup previously said Disney had agreed to acquire part of its assets for $20 million. The deal is structured as a 'stalking horse bid' — an opening bid at a bankruptcy auction — so another company may submit a higher offer.

Reasons for the bankruptcy

The court document states that, despite a 'large and engaged audience,' Character.AI was weakened by high costs as well as 'potential litigation-related liabilities and regulatory interactions.' The company was sued by the mother of a 14-year-old teenager who, according to her, became obsessed with one of Character.AI's chatbots before taking his own life; in addition, the company faces government investigations over child safety issues.