The Walt Disney Company has agreed to offer employment to the majority of Character.AI's workforce following the chatbot startup's bankruptcy filing, as the entertainment company moves to secure AI talent and technology through a proposed asset transaction.
According to court filings reported by TechCrunch, Disney has committed to making employment offers to at least 60 Character.AI employees, with their combined annual compensation estimated at approximately $60 million.
The filings indicate that the vast majority of employees who received offers have accepted them, although the agreement remains connected to an ongoing bankruptcy process.
The development follows Character.AI's Chapter 11 bankruptcy filing in October 2026, amid financial pressures, litigation risks and regulatory scrutiny surrounding its conversational AI services.
Disney had previously agreed to a proposed $20 million transaction involving certain Character.AI assets. However, the arrangement is structured as a stalking-horse bid, meaning other interested parties may submit competing offers during the bankruptcy proceedings.
The proposed transaction therefore does not represent a completed acquisition of the startup or its entire business.
Character.AI's former Chief Executive Officer, Karandeep Anand, has already joined Disney as its first company-wide Chief Technology Officer, bringing experience in conversational AI and consumer technology to the entertainment group.
Character.AI operates a platform that allows users to interact with AI-generated personalities through conversational interfaces. The company attracted a substantial user base but faced challenges involving operating costs and legal liabilities.
Court documents cited by TechCrunch attributed the company's difficulties partly to high expenses, potential litigation liabilities and regulatory engagement.
Character.AI has faced lawsuits concerning alleged harms involving minors who interacted with its chatbots, alongside government investigations into child safety practices. These matters remain part of the broader legal and regulatory context surrounding the company.
The employment arrangement gives Disney access to researchers, engineers and other technical professionals with experience developing conversational AI systems.
Separately, the proposed asset transaction could provide Disney with access to selected technologies developed by Character.AI, subject to the outcome of the court-supervised process.
The move comes as entertainment and media companies examine applications of generative AI across digital products, content development, audience engagement and internal operations.
Disney has also pursued AI partnerships beyond the Character.AI arrangement. In December 2025, the company announced a licensing agreement with OpenAI covering selected characters from Disney, Marvel, Pixar and Star Wars for use in AI-generated content.
The agreement included plans to use OpenAI technology in developing products and tools, including applications associated with Disney+.
While Disney's latest arrangement provides a route to expand its technical workforce, the company has not publicly detailed how the incoming Character.AI employees will be allocated across its businesses.
The final scope of the asset transaction will depend on the bankruptcy proceedings and whether competing bids emerge.
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