Character. AI files for bankruptcy in the US
What's the story
Character.AI, a leading player in the generative AI space, has filed for bankruptcy in the US. The company has also agreed to sell some of its assets to Disney for $20 million. The sale process will include a license of certain intellectual property and is currently underway through Chapter 11 proceedings.
Auction details
Court approval sought for auction rules
Character. AI is seeking court approval for auction rules that would make Disney the lead, or "stalking horse," bidder.
This means that Disney's bid would serve as a baseline offer, with other bidders allowed to submit higher bids.
The company expects this sale process to be completed by late November or early December 2026.
Financial disclosure
Platform shutdown risk if no buyer is found
In its bankruptcy filing, Character. AI has estimated its assets and liabilities to be between $50 million and $100 million.
Despite the challenging financial situation, the company intends to keep its business running, including the Character. AI platform.
It promises minimal service disruptions during this sale process. However, if no buyer is found who would continue operating this platform, it will be shut down.