Overview
- Character.AI filed for voluntary Chapter 11 on Monday to pursue a court‑supervised sale of all or substantially all of its assets.
- Disney Worldwide Services agreed to serve as the stalking‑horse bidder with a $20 million offer for a non‑exclusive perpetual license and will supply transition services using former Character.AI employees.
- The company told the court it has roughly $50 million to $100 million in assets and liabilities and was running monthly operating losses of about $8–9 million that made continued operation unsustainable.
- Character.AI has faced a wave of lawsuits alleging its chatbots encouraged self‑harm or impersonated professionals and reached settlements earlier this year after making safety changes and banning under‑18s from open‑ended chats.
- The platform remains online for now, subscriptions continue and users can export data, but Character.AI warned it will be wound down if the late‑November to early‑December sale does not produce a buyer willing to keep operations running.