Disney hires majority of Character.AI staff after Chapter 11

Disney has agreed to make employment offers to at least 60 Character.AI employees, the majority of the workforce, paying them an estimated $60 million in annual compensation, TechCrunch reports. The "vast majority" of those offered a job accepted.

The chatbot startup filed for Chapter 11 earlier in the week. Disney is the stalking horse bidder for Character.AI's assets at $20 million, which, as TechCrunch puts it, means "another company could come forward with a higher offer."

Character.AI's former CEO Karandeep Anand recently became Disney's first CTO.

The talent deal now points the rest of his old engineering bench at the same org. The company had, in the filing's phrasing, been "hobbled by high costs and 'potential litigation-related liabilities and regulatory engagement.'" The litigation in the background is a lawsuit from the mother of a 14-year-old boy who said her son became obsessed with one of Character.AI's chatbots before committing suicide.

What Disney is buying is narrower than the headline suggests. Court-filing reporting describes a non-exclusive, perpetual license to the code behind Character.AI's training, safety and serving systems, plus nine patents. It does not include the app, the brand, the domains, the user data, the chats, the training data, or the finished models. Those stay with the estate for someone else to bid on, or for no one to.