Disney bids $20m for licence to Character.AI technology in bankruptcy sale
Disney has offered $20 million for a perpetual, non-exclusive licence to some of the technology behind Character.AI, which is being sold through bankruptcy proceedings. The bid is notable because Disney previously accused the chatbot company of using its characters in harmful chatbots that could damage the brand, and the controversy has since included lawsuits over alleged harm to children.
The offer covers unspecified intellectual property, and Disney may be outbid; the sale could conclude by late November or early December 2026. Character.AI says its platform will remain available during the process, with existing subscriptions continuing unless service changes affect their agreements. The company reported more than 20 million monthly active users last year, while its bankruptcy filing estimated assets and liabilities of $50 million to $100 million.
- Disney has bid $20 million for some Character.AI technology.
- The chatbot platform is being sold through bankruptcy.
- Character.AI says it will remain online during the sale.
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Character.AI is a company whose platform lets people create and chat with artificial intelligence characters, including ones based on familiar fictional figures. Disney owns many well-known characters and has previously challenged the use of its characters in chatbots, arguing that some could harm its brand.
The dispute sits within wider concerns about how AI chatbots interact with children and who is responsible when users are harmed. Character.AI is also going through bankruptcy proceedings, a legal process for dealing with a company’s finances and assets; the outcome may affect who can use some of its technology and on what terms.
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The case for
A licence could give Disney a way to use technology it regards as valuable while limiting the risk that unauthorised chatbots misuse its characters. Because the proposed licence is non-exclusive and the sale is part of bankruptcy proceedings, the bid may also offer value to creditors without preventing Character.AI or others from continuing to operate the platform.
The case against
The bid may be seen as a troubling turn after Disney alleged that Character.AI’s use of its characters created harmful chatbots, amid lawsuits alleging harm to children. A perpetual licence to unspecified technology could also leave questions about how it will be used and what protections users and rights holders will have, while the sale could affect a platform with millions of users.
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Originally published by Ars Technica as “Disney offers $20M for Character.AI’s scandal-plagued chatbot tech”.