Character.AI Files for Bankruptcy and Seeks a Buyer
Character.AI, the developer of the conversational companion platform, has filed for voluntary Chapter 11 bankruptcy and is looking for a buyer through a court-supervised auction. The company attributes the move to mounting regulatory, legal, and operational pressure.
The Walt Disney Company made the first bid: $20 million for a perpetual non-exclusive license, along with a commitment to provide technical support staffed by former startup engineers it had previously hired. The court will also consider outside offers that beat that bid, and the sale is expected to close by early December.
The platform keeps running until the auction ends, but the project will be shut down if the new owner declines to support it.