American company Character Technologies, developer of the popular conversational artificial intelligence service Character.AI, announced the start of bankruptcy proceedings under Chapter 11 of the US Bankruptcy Code. As part of this procedure, the startup agreed to sell part of its assets to Walt Disney for $20 million.
American company Character Technologies, developer of the popular conversational artificial intelligence service Character.AI, announced the start of bankruptcy proceedings under Chapter 11 of the US Bankruptcy Code. As part of this procedure, the startup agreed to sell part of its assets to Walt Disney for $20 million.
According to an official statement from Character.AI, the agreement with Disney involves the transfer of a license for certain intellectual property. The service has already applied to the court to approve the rules of the auction, where Walt Disney will act as the so-called "primary buyer." This means that Disney's offer of $ 20 million will be the starting price, but other companies will also be able to submit higher bids, Reuters reports .
The company expects to complete the sale process by the end of November or early December 2026.
“After a comprehensive analysis of available alternatives, the board of directors has concluded that this court-supervised sale process provides the company with the best opportunity to maximize value for all stakeholders,” said Colin Adams, CEO of Character.AI.
According to court documents, Character Technologies' estimated assets and liabilities range from $50 million to $100 million.
The company assured that they plan to continue operating the Character.AI service with minimal disruption to users throughout the sales process.
However, the future fate of the platform depends entirely on the results of the auction: if the process does not attract a buyer ready to support the platform, the Character.AI service will be permanently closed.
