Disney Offers $20 Million For Character.AI Assets As Startup Files For Bankruptcy
- Reference: 0186301722
- News link: https://yro.slashdot.org/story/26/10/13/1956200/disney-offers-20-million-for-characterai-assets-as-startup-files-for-bankruptcy
- Source link:
> The company, which allows users to create and interact with AI-generated avatars, said it made the filing in U.S. Bankruptcy Court for the District of Delaware. It said it hopes the process will allow it to "facilitate a value-maximizing sale of all or substantially all" of its assets. The Character.AI platform will continue to operate during the bankruptcy.
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> The Disney agreement, reached prior to the filing, would give the media giant a non-exclusive perpetual license of select intellectual property and company claims from Character.AI. Disney would pay $20 million and provide resources during a transition period as the company explores a sale. [...] Character.AI said it is aiming to conclude the sale process by late November or early December.
Character.AI has faced a series of controversies over the past year or so. Most notably, the company [3]settled multiple lawsuits alleging its chatbots encouraged self-harm and suicide among teenagers, including a high-profile case involving 14-year-old Sewell Setzer III.
The company also faces lawsuits from Kentucky, which alleges its chatbots encouraged self-harm, and Pennsylvania, which claims the bots illegally impersonated licensed doctors. The latter allegations follow [4]earlier complaints that Character.AI's therapy chatbots engaged in the unlicensed practice of medicine.
In September 2025, Disney [5]accused Character.AI of copyright infringement and using its characters in chatbots that were "sexually exploitive and otherwise harmful and dangerous to children," prompting their removal from the platform. These mounting legal challenges and regulatory scrutiny ultimately contributed to this eventual bankruptcy filing.
[1] https://blog.character.ai/an-update-on-character-ai/
[2] https://deadline.com/2026/10/disney-character-ai-chapter-11-bankruptcy-1237155582/
[3] https://yro.slashdot.org/story/26/01/07/2211252/google-and-characterai-agree-to-settle-lawsuits-over-teen-suicides
[4] https://slashdot.org/story/25/06/13/2015216/ai-therapy-bots-are-conducting-illegal-behavior-digital-rights-organizations-say
[5] https://www.axios.com/2025/09/30/disney-characterai-cease-desist
Doing AI all wrong (Score:1)
This is what happens when you try to make money through AI and fail to deliver a bunch of headlines about how your AIs commit a fuckton of felonies.
Should have kept the investors interested by posting things like "Sora from Kingdom Hearts bot already drove 69 teens to suicide, and he's only getting started!" or "Our users develop psychoses faster than those on actual heroine!"; boom, trillion dollar IPO.
Oh and I don't think they even tried to build a 80 billion datacenter they don't have power for, with
Re: (Score:2)
Never be honest with investors. They never know what they should invest in, and never will.
Re: (Score:2)
I mean, as the money is, over time, further and further removed from the median Person Who Actually Worked To Earn It, as opposed to having inherited it, I'd argue the average investor is inevitably getting dumber and dumber.
Encouraging self harm? That's edgy. (Score:2)
"Come on kid, cut yourself. It's the only way to feel alive."
80s song lyric (Score:2)
> "Come on kid, cut yourself. It's the only way to feel alive."
I can see that in an 80s song lyric and I can also see Al and Tipper Gore wanting that album banned to save the children.
And you wonder why Gen X does not trust either political party. :-)
And... (Score:1)
another one...