Disney to hire about 60 staff of bankrupt Character.AI in $20 million asset bid
In short
Disney has offered jobs to 60 or more employees of Character.AI, the AI chatbot company that filed for bankruptcy protection on 12 October, according to court filings cited by Korean outlets. Disney plans to spend about $180 million over three years and has bid $20 million for some assets and technology. The deal needs bankruptcy court approval and could face rival bids.
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Disney has offered jobs to 60 or more employees of Character.AI, an AI chatbot company that filed for bankruptcy protection on 12 October, according to Korean outlets citing court filings. ZDNet Korea, citing Bloomberg, said the filings were made public in documents submitted to a U.S. bankruptcy court. AI Times said they were filed in Delaware. Yonhap, citing Forbes, put the number at about 65 engineers. [ 1 , 2 , 3 ]
Annual pay for the hires is estimated at about $60 million. Disney has also set aside $30 million in retention money, part of which is to be paid at the first and second anniversaries of closing, according to ZDNet Korea and AI Times. ZDNet Korea and AI Times put Disney's spending over three years at about $180 million, and Yonhap said Disney plans to spend about $180 million in total pay and other costs over three years. Newsis and Dong-A Ilbo, citing TechCrunch, and AI Times said most of those who received offers accepted. [ 1 , 2 , 3 , 4 , 5 ]
Disney has also bid $20 million for some Character.AI assets and technology, and $7.5 million of that was paid before the bankruptcy filing, according to ZDNet Korea and AI Times. The deal requires court approval. AI Times said it is structured as a stalking horse bid that lets other companies offer more, that an auction could be held in November if a competing bid comes in, and that Disney will let the employees it has offered jobs interview with other companies. Yonhap, citing Forbes, said Disney would receive a non-exclusive, perpetual, worldwide license to Character.AI's technology and patents and wants transferred employees protected from lawsuits by creditors. It also said Disney excluded user data, conversation records, training data and character intellectual property from the deal. [ 1 , 2 , 3 ]
Karandeep Anand, Character.AI's former CEO, is already Disney's chief technology officer. ZDNet Korea said Disney and Character.AI also signed a license agreement at that time. Newsis and Dong-A Ilbo said the two companies had earlier clashed over copyright: Disney sent a letter in September 2025 demanding that Character.AI stop using its protected characters. Yonhap said Disney had sent Character.AI a letter demanding corrections in September of last year. [ 1 , 3 , 4 , 5 ]
Character.AI struggled with high operating costs, litigation costs and regulatory scrutiny, according to AI Times, Newsis and Dong-A Ilbo. AI Times and Yonhap said it was losing $8 million to $9 million a month before the filing. Newsis and Dong-A Ilbo said it was sued over the 2024 death of a 14-year-old boy whose mother said he took his own life after becoming deeply absorbed in its chatbot. ZDNet Korea said state attorneys general told the court on 14 October that any buyer of the platform must adopt effective age verification and child-protection measures. AI Times said attorneys general from 40 states had made similar requests. Newsis and Dong-A Ilbo said the company expects the sale to close in late November or early December, and that CEO Colin Adams said the platform would shut down without a viable offer to keep it running. [ 1 , 2 , 3 , 4 , 5 ]
Why it matters
The deal would move most of a bankrupt AI company's workforce to Disney. Outlets also point to open questions about legal liability tied to child-safety lawsuits, which state attorneys general have raised with the court.
Key facts
- Disney has offered jobs to at least 60 Character.AI employees, according to court filings cited by the outlets; Yonhap, citing Forbes, put the number at about 65 engineers. [ 1 , 2 , 3 , 4 , 5 ]
- Character.AI filed for bankruptcy protection on 12 October. [ 1 , 2 , 3 ]
- Annual pay for the hires is estimated at about $60 million. [ 2 , 3 , 4 , 5 ]
- Disney has set aside $30 million in retention money, part of it payable at the first and second anniversaries of closing, according to ZDNet Korea and AI Times. [ 1 , 2 , 3 ]
- Disney plans to spend about $180 million over three years on the hires. [ 1 , 2 , 3 ]
- Disney has bid $20 million for some Character.AI assets and technology, of which $7.5 million was paid before the bankruptcy filing; the deal needs court approval. [ 1 , 2 ]
- A competing bid could trigger an auction in November. [ 1 , 2 ]
- Former Character.AI CEO Karandeep Anand has become Disney's chief technology officer. [ 1 , 2 , 3 , 4 , 5 ]
Confirmed by several sources
- Disney offered jobs to at least 60 Character.AI employees, and most of those offered reportedly accepted. [ 1 , 2 , 4 , 5 ]
- Estimated annual pay for the hires is about $60 million. [ 2 , 3 , 4 , 5 ]
- Disney set aside $30 million for retention. [ 1 , 2 , 3 ]
- Character.AI filed for bankruptcy protection on 12 October. [ 1 , 2 , 3 ]
- Disney bid $20 million for some Character.AI assets and technology, and other companies could make higher offers. [ 1 , 2 , 3 , 4 , 5 ]
- Karandeep Anand, Character.AI's former CEO, joined Disney as chief technology officer before this deal. [ 1 , 2 , 3 , 4 , 5 ]
- Disney and Character.AI had earlier clashed over the use of Disney characters. [ 1 , 3 , 4 , 5 ]
Still unclear
- How many employees are involved. Most outlets say 60 or more; Yonhap, citing Forbes, says about 65 engineers. Newsis and Dong-A Ilbo say the offers cover more than half of all staff, while ZDNet Korea and Yonhap say most of the staff.
- When Anand became Disney's CTO. Yonhap says he moved on the 2nd and was among those covered by the hiring agreement; Newsis and Dong-A Ilbo say he was appointed in September, ZDNet Korea says last month, and AI Times says several weeks ago.
- What the deal excludes. Only Yonhap, citing Forbes, says Disney excluded user data, conversation records, training data and character intellectual property from the purchase.
- Whether Disney will take on legal liability. AI Times and ZDNet Korea say bankruptcy-law protection covers only liabilities that arose before the asset sale and does not remove all legal risk; the outcome depends on court review.
- Whether the platform will keep running. Newsis and Dong-A Ilbo, citing TechCrunch, say CEO Colin Adams said the platform would shut down if no viable offer to keep it running emerged.
What local media are saying
Timeline, local time
- ZDNet Korea published its report, citing Bloomberg, on 19 October. [ 1 ]
- AI Times published its report on 19 October. [ 2 ]
- Yonhap published its report, citing Forbes, on 20 October. [ 3 ]
- Newsis published its report, citing TechCrunch, on 20 October. [ 4 ]
- Dong-A Ilbo published the same report on 20 October. [ 5 ]