Disney to hire majority of Character.AI’s workforce in stalking-horse bid

Disney agreed to hire at least 60 employees from Character.AI, the chatbot startup that filed for bankruptcy, according to a legal filing cited by Bloomberg. The commitment represents the majority of Character.AI’s workforce and is part of a broader agreement where Disney also agreed to acquire some of the startup’s assets for $20 million.

The employment offer includes an estimated $60 million in annual compensation for the hires, and the filing states that the ‘vast majority’ of Character.AI employees who were offered positions accepted Disney’s terms. However, the agreement is structured as a stalking-horse bid, meaning another company could submit a higher competing offer before the bankruptcy court finalizes the sale.

Character.AI’s bankruptcy filing attributes its collapse to high operational costs, potential litigation-related liabilities, and regulatory engagement, including government investigations into child safety concerns. The company is also facing a lawsuit from the mother of a 14-year-old boy who alleged her son became obsessed with one of Character.AI’s chatbots before his death.

Disney’s move follows the appointment of Character.AI’s former CEO, Karandeep Anand, as Disney’s first Chief Technology Officer, signaling the entertainment giant’s growing investment in AI-driven technologies.