Character.AI files Chapter 11 as Disney bids for selected assets

Key takeaways

Character.AI says it will keep operating during a court-supervised sale process; Disney's $20 million bid is not a completed purchase.

What happened

Character.AI announced a voluntary Chapter 11 filing and a proposed court-supervised sale process. Disney agreed to act as a stalking-horse bidder for a non-exclusive licence to selected intellectual property and other assets in exchange for $20 million, subject to higher offers and court procedures. The company says it intends to keep its platform operating during the process. The final buyer and the platform's long-term future are not settled.

Why it matters

The filing may affect users, employees and the market for AI entertainment tools, but bankruptcy does not mean the service has shut down today.

What to watch

Watch court approvals, competing bids and the company's service updates.

Sources

• Character.AI company release | https://www.businesswire.com/news/home/20261012656385/en/
• Reuters | https://www.streetinsider.com/Reuters/Character.AI%2Bfiles%2Bfor%2Bbankruptcy%2C%2Bagrees%2Bto%2Bsell%2Bsome%2Bassets%2Bfor%2B%2420%2Bmillion/27175629.html