Disney poached Character.AI’s former CEO to lead its tech efforts just weeks ago. Now, the media giant is making a bid for rights to some of the controversial AI startup’s assets.
Character.AI announced late Monday night that it had filed for Chapter 11 bankruptcy protection to pursue a court-supervised sale of all or substantially all of its assets. Disney has agreed to serve as the initial bidder, offering $20 million for a non-exclusive, perpetual license to certain Character.AI intellectual property and other claims.
Other potential buyers can still submit higher or better offers. In its bankruptcy filing, Character.AI listed between $50 million and $100 million in estimated assets, along with the same range in liabilities.
For now, Character.AI says its platform will continue operating without any major disruptions. However, the company warned that it could eventually shut down the service if it fails to find a buyer willing to keep it running. Character.AI expects to complete the sale process by late November or early December.
“Over the past year, Character.ai has taken meaningful steps to sustain and improve its business in the face of significant legal, regulatory, and operational headwinds,” said Character.AI CEO Colin Adams in a press release. “After a comprehensive review of the available alternatives, the board determined that this court-supervised sale process provides the Company with the best opportunity to maximize value for all stakeholders.”
AI is an AI platform, founded in 2021, best known for letting users create and interact with chatbots based on fictional characters, celebrities, and original personas.
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