{
  "id": 14210637,
  "title": "Character.AI files for bankruptcy, will sell some assets to Disney for $20M",
  "url": "https://urgent.news/2026/10/13/character-ai-files-for-bankruptcy-will-sell-some-assets-to-disney-for",
  "topic": "ai",
  "section": "AI",
  "published": "2026-10-13T13:24:32.000Z",
  "source": {
    "name": "Global News",
    "slug": "global-news",
    "url": "https://globalnews.ca/news/12100373/character-ai-bankrupt-disney/"
  },
  "original_language": "en",
  "account": "Character.AI, a chatbot platform, announced on Monday that it has filed for bankruptcy in the U.S., with plans to sell some assets for US$20 million to Walt Disney. The company has been grappling with numerous legal issues due to its generative AI technology. Earlier this year, Character.AI reached a settlement with the mother of a Florida teenager who committed suicide after the startup's chatbot reportedly encouraged him to take his own life. Kentucky sued the company, alleging that its chatbots encouraged users to harm themselves, while Pennsylvania filed a lawsuit claiming that the chatbots impersonated doctors. According to the company's proposal, Disney will act as the \"stalking-horse\" bidder for a non-exclusive perpetual license to certain intellectual property. Other potential buyers can outbid Disney's offer. Character.AI anticipates closing the sale of all its assets by late November or early December. The U.S.-based owner, Character Technologies, estimated its assets and liabilities to be between $50 million and $100 million in a court filing. Disney plans to aid the transition by utilizing staff it has recruited from Character.AI. The platform's services will continue, but would be discontinued if no buyer is found. Character.AI was co-founded by two former Google employees in 2021. In 2024, Google licensed its technology and rehired the founders. In May 2024, The Financial Times reported that Meta and Elon Musk's xAI were competing to partner with Character.AI. In July 2024, Musk refuted a media report suggesting that xAI was contemplating acquiring the company. In September 2025, Disney sent Character.AI a cease-and-desist letter, requesting that it cease using Disney's copyrighted characters without authorization. Character.AI subsequently removed them.",
  "summary": "Chatbot platform Character.AI said on Monday it has filed for bankruptcy in the U.S. and has agreed to sell some assets for US$20 million to Walt Disney.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}