Disney to hire most of Character.AI team following bankruptcy

Job Offers

Chatbot startup Character.AI filed for bankruptcy earlier this week, and many of its employees will now get job offers from Disney. A legal filing shows that Disney plans to offer jobs to at least 60 workers, which is the majority of the startup team. These employees will get an estimated $60 million in total pay every year. Most of the workers who got these job offers have already accepted them.

Asset Deal

This agreement is a stalking horse bid, meaning another company can still step in with a higher offer. Character.AI previously stated that Disney also agreed to buy some of its company assets for $20 million. Former Character.AI CEO Karandeep Anand recently took on the role of first chief technology officer at Disney.

Company Troubles

The legal filing explains that Character.AI faced big problems despite having a large and active user base. The startup struggled with high operating costs, potential legal liabilities, and government checks. The company previously faced a lawsuit from a mother whose 14-year-old son grew obsessed with a chatbot before taking his own life, and it also faces government investigations over child safety.

Context

Bankruptcy filings often reveal hidden financial details and asset sale plans when tech startups run out of money. Major entertainment companies sometimes acquire startup teams to bring in specialized tech talent quickly.