Disney has agreed to offer jobs to most of the workforce at Character.AI, the AI chatbot startup that filed for bankruptcy earlier this week.
According to a legal filing reported by Bloomberg, Disney will make employment offers to at least 60 Character.AI employees, representing the majority of its staff, with estimated annual compensation totaling $60 million. The filing states that the vast majority of employees who received offers have accepted them. Character.AI had previously said Disney agreed to acquire some of its assets for $20 million, though the deal is a stalking horse bid, meaning another company could still come forward with a higher offer.
The move follows the appointment of Character.AI’s former CEO Karandeep Anand as Disney’s first CTO.
The filing said that despite a large and engaged user base, Character.AI had been weighed down by high costs, potential litigation-related liabilities and regulatory engagement. The company has faced a lawsuit from the mother of a 14-year-old boy who alleged her son became obsessed with one of its chatbots before his death, and it is also the subject of government investigations over child safety concerns.
The arrangement offers a landing spot for Character.AI’s AI talent as the startup winds down its operations under bankruptcy proceedings.
