Disney Hires 60+ Character.AI Staff After Bankruptcy
Disney will hire most of bankrupt chatbot startup Character.AI's staff for about $60M a year, plus a $20M asset bid, with ex-CEO Karandeep Anand as its first CTO.
Character.AI, the once-hot chatbot startup, filed for bankruptcy this month. Now Disney is moving in to pick up the pieces: the entertainment giant has agreed to offer jobs to at least 60 of the startup's employees - most of its workforce - with about $60 million a year in combined pay, according to a bankruptcy court filing first spotted by Bloomberg and reported by TechCrunch.
The $20M deal behind the hiring plan
Disney had already agreed to buy some of Character.AI's assets for $20 million before the bankruptcy filing. The new legal filing adds the hiring terms: employment offers to at least 60 staff members, and the filing says the "vast majority" of those who received offers have already accepted them. The deal is structured as a stalking horse bid. That means Disney's offer sets the opening price in the bankruptcy sale, but another company can still come in with a higher offer and win the assets instead. The sale process is supervised by a bankruptcy court. Character.AI's former CEO, Karandeep Anand, is also joining Disney as its first chief technology officer, putting the founder of the chatbot company in charge of Disney's technology strategy.
Why Character.AI collapsed
The filing says the startup was hobbled by high costs and "potential litigation-related liabilities and regulatory engagement," even though it had a "large and engaged user base." The legal troubles are serious. Character.AI was sued by the mother of a 14-year-old boy who said her son became obsessed with one of its chatbots before dying by suicide. The company also faces government investigations over child safety concerns.
What Disney gets out of it
For Disney, the deal is a fast way to buy proven conversational AI talent at a fraction of the startup's former value. The team could shape Disney's own AI projects, from chatbots inside Disney apps and games to new interactive experiences built around its characters. Bringing in Anand as CTO signals that Disney wants AI to be a bigger part of its future across entertainment, streaming, and theme parks.
The deal is not final yet
Because the agreement is a stalking horse bid, rival bidders still have time to top Disney's offer before the court approves a final sale. So while the job offers are moving ahead, the asset purchase itself is not locked in. Character.AI's users also still do not know what will happen to the platform long term.
Sources
- TechCrunch - https://techcrunch.com/2026/10/18/disney-agrees-to-hire-the-majority-of-character-ais-workforce/ - Dataconomy - https://dataconomy.com/2026/10/19/disney-offers-jobs-to-60-bankrupt-character-ai-staff/