Character.AI files for bankruptcy protection

Character.AI has filed for Chapter 11 bankruptcy protection in the United States to advance the sale of the company and its assets, with Disney expected to be the main bidder for its assets. The company listed estimated liabilities between $50 million and $100 million. Under the proposed transaction, Disney would pay $20 million to acquire certain undisclosed assets, provide transition support, and obtain a non-exclusive intellectual property license. Disney had previously hired Character.AI's former CEO Karandeep Anand as CTO, and a group of Character.AI technical team members is expected to join. Character.AI said it expects the sale process to complete by late November or early December, during which it will continue operating services including paid subscriptions, and the platform will be shut down if no suitable offer is received.