Timeline
- 7.5
Disney agrees to hire the majority of Character.AI’s workforce
After chatbot startup Character.AI filed for bankruptcy earlier this week, Disney agreed to hire the majority of its workforce and to acquire some of the company's assets for $20 million. Character.AI's former CEO, Karandeep Anand, had already joined Disney as its first chief technology officer. The arrangement shifts most of a well-known consumer AI startup's team into a major entertainment company, following Disney's earlier hire of the startup's chief executive into a newly created CTO role. The $20 million figure covers some of Character.AI's assets, according to the startup's earlier statement. The report references a legal matter involving Character.AI, but its details were not included.
- 8.0
Now that Character.AI is going bankrupt, what happens to all of its users’ data?
New York Attorney General Letitia James revealed a years-long multi-state investigation into Character.AI and joined 40 bipartisan state attorneys general in filing a notice of interest in the company's bankruptcy case. The filing seeks to require protections for consumer data that may be sold through the bankruptcy proceeding. The coordinated action by 40 bipartisan state attorneys general puts the sale of a major consumer AI platform's user data under regulatory scrutiny, signaling that state authorities intend to have a say in how such data is transferred in insolvency. According to the source, the notice of interest is intended "to put all parties on notice of the regulatory issues" involved; it is a notice filing rather than a court ruling or an approval of any sale terms.
- 8.5
Just 5 years in, interactive chatbot platform Character.AI files for bankruptcy
Character.AI filed for Chapter 11 bankruptcy protection in the United States on October 12, roughly five years after launch, and Disney has submitted a $20 million initial bid for some of its assets. The company expects to complete the sale between late November and early December. The platform has not shut down yet, but the company says it will stop service if no buyer is found to keep operating it, and users have already begun asking how to preserve chat histories with their AI characters that span several years. Disney's initial offer covers only a perpetual, non-exclusive license to some of Character.AI's intellectual property and related rights, and the entertainment company has not committed to taking over the whole platform. Character.AI's former CEO Karandeep Anand joined Disney as chief technology officer on October 2, with some technical staff moving with him; those departed employees are helping keep Character.AI running temporarily during the sale process.