Court documents tied to Character.AI’s bankruptcy show Disney had already moved to hire much of the company’s workforce before the filing. Disney sent job offers to 66 employees, with 56 already gone and another 10 waiting for visa adjustments. Over the next three years, Disney expects to spend about $180 million on that group, including $30 million in retention bonuses.
The filing also draws a sharp contrast between the value Disney placed on personnel and the price attached to certain company assets. Disney offered $20 million for permanent, non-exclusive rights to parts of Character.AI’s technology and patents. The deal does not include the existing app, the brand, user chat logs, or finished models, indicating Disney is not seeking to acquire and run the full chatbot platform.
By the time Character.AI entered bankruptcy, it had only 18 full-time employees left. Of those, 10 were still waiting to move to Disney, and the company expected just eight to remain through the critical stages of the bankruptcy process, including roughly six handling security work. The case has also drawn intervention from 40 state attorneys general in the U.S., who want safeguards for private user chats as assets are sold. Other bidders have until Nov. 20 to submit offers. If no buyer is willing to keep the service running, Character.AI will shut down.
Bankruptcy court documents show Disney had already sent job offers to 66 Character.AI employees before the company filed for bankruptcy. Of that group, 56 had already left, while another 10 were waiting for work visa adjustments.
Disney expects to spend about $180 million over the next three years on those employees, including $30 million in retention bonuses. By comparison, Disney’s bid for parts of Character.AI’s technology and patents was only $20 million, in exchange for permanent, non-exclusive usage rights.
The agreement specifically excludes the existing app, the brand, user chat records, and finished models. Disney is not seeking to take over the entire chatbot platform.
Only 18 full-time employees remained at filing
Character.AI had just 18 full-time employees left when it filed for bankruptcy. Of those, 10 were still waiting to transfer to Disney. The company expects only eight people to remain through the key stages of the bankruptcy process, with about six focused on security-related work.
Because of the staffing shortage, Disney will also bring back some employees who have already moved to new roles on a temporary basis to help keep the original platform operating.
State attorneys general seek protections for private chats
At the same time, 40 state attorneys general in the United States have intervened in the bankruptcy process, asking for protections for users’ private chat records so the data is not misused after any asset sale.
Other buyers can submit bids until Nov. 20. If no party is willing to continue operating the service, Character.AI will shut down.
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