Character.AI just filed for bankruptcy, and former foe Disney may buy it for parts

Character.AI, a controversial generative AI startup that lets users create their own chatbot characters, has filed for Chapter 11 bankruptcy. The company, which lost key talent to Google and had its former CEO hired by Disney, allowed Disney to make the first offer on its assets for 20 million, pending higher offers. Character expects the sale to be completed by early December. In its blog post, Character said it filed for Chapter 11 protection to facilitate the sale of the company and its assets, listing liabilities of between 50 million and 100 million. As the lead "stalking horse" bidder, Disney would buy certain assets and provide transition support using staff it previously hired from Character.AI.