Disney to pay $20M for Character.ai intellectual property as the startup files Chapter 11

Benzinga's weekly deal roundup reports that Character.ai filed for Chapter 11 bankruptcy and intends to pursue a court-supervised sale of the platform before year end. Separately, Disney agreed to pay $20M for select intellectual property. Disney will also provide transition support through former Character.ai employees who now work at the entertainment group. The arrangement is meant to keep the consumer chatbot service running through the bankruptcy process. Character.ai is one of the best-known consumer AI chatbot companies. The $20M price covers assets only, so it is not a measure of the company's enterprise value. A later sale of the remaining platform could be a separate transaction. For AI founders, the case shows how consumer chat products can end up as asset sales when training costs and inference spend outrun revenue. Talent and IP licensing deals with big buyers can leave the remaining company without the people or rights needed to survive.