Character.AI has filed for Chapter 11 bankruptcy and is selling assets to Disney in a $20 million lead bid. The move follows years of safety lawsuits and comes after Disney hired the startup’s former CEO and several technical staff.
Disney had previously sent cease-and-desist letters regarding unauthorized chatbots of its characters.
If no suitable bid emerges, the platform will be wound down, though Character.AI said maintaining a safe and engaging experience for users remains a top priority during the transition.
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