Disney has agreed to hire more than 60 employees from the chatbot startup Character.AI and pay them roughly $180 million over three years, according to a bankruptcy filing first reported by Bloomberg. The agreement also includes about $30 million for retention awards, and it still needs approval from a bankruptcy judge.
The news lands just days after Character.AI filed for bankruptcy earlier this week, as TechCrunch reported. In a separate filing, the startup said Disney had already agreed to acquire some of its assets for $20 million — but the new paperwork shows the deal goes well beyond buying technology: it is largely a transfer of people.
Disney to hire most of Character.AI's workforce
According to the filing spotted by Bloomberg, Disney has agreed to make employment offers to at least 60 Character.AI employees, which represents the majority of the company's workforce. The filing puts their estimated annual compensation at about $60 million, and states that the "vast majority" of those who received offers have accepted.
Character.AI's former CEO, Karandeep Anand, recently became Disney's first CTO, giving the entertainment giant a direct link to the startup's engineering and product talent. The arrangement is structured as a stalking horse bid, which means another company could still step in with a higher offer before the bankruptcy proceedings move forward.
Why Character.AI filed for bankruptcy
The filing describes a company that built a "large and engaged user base" but could not carry the cost of running it. It points to high operating expenses as well as "potential litigation-related liabilities and regulatory engagement" as factors weighing on the business.
Character.AI has faced serious legal pressure: it was sued by the mother of a 14-year-old boy who said her son became obsessed with one of its chatbots before taking his own life, and it is the subject of government investigations over child safety concerns. Those issues form the backdrop to a deal in which Disney buys access to a team rather than a healthy standalone business.
