Character.AI files for bankruptcy, agrees to sell assets to Disney for $20 million

Character.AI has filed for bankruptcy protection in the U.S. and has agreed to sell a portion of its assets to Walt Disney for $20 million, approximately 134 million yuan at current exchange rates. The company has initiated the asset sale process under Chapter 11 bankruptcy proceedings and is seeking court approval to auction its intellectual property, with Disney designated as the lead bidder. Disney's offer will serve as the minimum bid, but other bidders may submit higher offers. The sale is expected to be finalized in late November or early December 2026. Character.AI will continue to operate its existing services during the asset sale to minimize disruptions. If no buyer is found to operate the platform, the company will gradually phase out its services. Character.AI is a platform driven by large language models, offering millions of AI characters created by users or the company, including anime, game characters, historical figures, and original characters.