One of the best-known AI companion apps is heading into court. Character.ai filed for Chapter 11 bankruptcy in Delaware on 12 October to run a court-supervised sale of almost all its assets, CNBC and the Wall Street Journal reported. CNBC said the company cited costs and litigation.
Where Disney comes in
Disney is the “stalking-horse” bidder. That means it has made the first, baseline offer that other buyers must beat. According to US News, Disney is offering $20 million for a non-exclusive, perpetual license to Character.ai’s intellectual property, plus transition services.
What happens to the app?
In its own update, Character.ai says the platform will keep running during the sale. If no viable buyer emerges, the service will be wound down.
Timeline
- 12 October: Chapter 11 filing in Delaware.
- Sale process expected to finish by late November or early December.
- 17 December: Disney’s deadline to close.
Why it matters
Character.ai was once one of the most popular consumer AI apps. Its filing shows how expensive it is to run large AI services, and how legal pressure is shaping the companion-chatbot market. Users who care about their chats and characters should watch the company’s official updates.
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Sources: CNBC; Character.ai blog; US News.
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