Disney bids $20 million for Character.AI's tech in bankruptcy, budgeting $180 million for its engineers as 40 attorneys general eye the app's chat data
Episode notes
Disney is the lead bidder in the Chapter 11 bankruptcy of Character.AI. Character Technologies filed in Delaware on October 12, 2026, and agreed to sell some assets to Disney for $20 million in cash: a nonexclusive, perpetual license to the code behind its training, safety and serving systems, plus nine patents. The app, the brand, user data, chats and finished models are not part of Disney's bid and remain open to other bidders. Rival bids are due November 20, with an auction November 23 and a sale hearing November 24.
Disney separately expects to spend about $180 million over three years on compensation and retention for roughly 65 Character.AI employees it has hired. The move follows Disney naming former Character.AI CEO Karandeep Anand as its first chief technology officer. On October 14, a bipartisan group of 40 attorneys general filed notice in the case, asking that any sale of the app or its user data include protections for children and sensitive chats.
Editorial lens: Disney is buying Character.AI's know-how rather than its users, paying $20 million for a nonexclusive license to its code and nine patents and budgeting about $180 million over three years for roughly 65 engineers under new CTO Karandeep Anand, while the app and its chat data, the part 40 attorneys general are now watching, stay behind for other bidders.
Photo: The Walt Disney Company (Karandeep Anand).
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