Character.AI filed for bankruptcy, and Disney has agreed to hire most of the startup's workforce. The companies had earlier arranged for Disney to acquire some Character.AI assets for $20 million, and Character.AI's former CEO Karandeep Anand recently became Disney's first CTO. The report also references a legal matter that is not detailed in the supplied text.
Disney has offered $20 million for a non-exclusive perpetual license to certain Character Technologies intellectual property in a bankruptcy proceeding, according to a Character.AI press release. The offer covers technology powering the controversial chatbot Character.AI, though the release did not specify which assets Disney wants. The move follows Disney’s September 2025 cease-and-desist letter accusing Character Technologies of misusing Disney characters and harming children.
According to a Bloomberg report, Epic Games is moving to an 'AI first' development model for its collaboration with Disney, with AI models like Anthropic's Claude writing all code and guiding artwork. Human developers would manage and direct the AI-generated code and assets. The $1.5 billion Epic-Disney project, announced in early 2024 and slated for March 2027, has reportedly been delayed indefinitely amid the shakeup.
