Character.AI filed for Chapter 11 bankruptcy. It listed assets and liabilities between $50 million and $100 million. The company agreed to sell some assets to Disney for $20 million. Disney also receives a non-exclusive perpetual license for its technology. Disney will provide transition services using former Character.AI employees. The sale process is expected to close in late November or early December. Character.AI will continue operating during the sale process. No bid for the company’s assets or a buyer exists yet. The platform may be wound down if no bid emerges. The company was founded in 2021 by Noam Shazeer and Daniel De Freitas. It reached 20 million monthly active users by October 2024. Legal and regulatory challenges contributed to its financial struggles.
What changed
Character.AI operated as a going concern with active user growth and product expansion.
What it unlocks
Disney gains a non-exclusive perpetual license to Character.AI's technology.
- $50M to $100M assets and liabilities
- $20M asset sale to Disney
- $193M total funding raised
- 20M monthly active users at peak
Sources