Disney Secures Majority of Character.AI Workforce in Post‑Bankruptcy Deal

Employment Agreement and Compensation

Following Character.AI’s bankruptcy filing earlier this week, Disney has offered jobs to at least 60 of the startup’s employees—constituting the majority of its staff. The offers carry an estimated total annual salary of roughly $60 million. The legal filing that disclosed the arrangement, first reported by Bloomberg, also confirms that the former CEO, Karandeep Anand, has already taken the role of Disney’s chief technology officer.

Asset Purchase and Stalking Horse Provision

Disney previously announced a $20 million agreement to acquire select assets of Character.AI. The same filing notes that the employment package is structured as a stalking‑horse bid, meaning another bidder could still submit a higher proposal for the company’s remaining assets or workforce.

Challenges That Led to the Sale

Despite maintaining a large and engaged user base, Character.AI has been constrained by soaring operational costs and legal exposure. The company faces a lawsuit from the mother of a 14‑year‑old boy who allegedly became obsessed with a Character.AI chatbot before taking his own life, and it is also under government scrutiny for child‑safety concerns. These liabilities, together with regulatory engagement, contributed to the decision to seek a buyer.

The overwhelming acceptance of Disney’s offers by the “vast majority” of the workforce underscores the appeal of a stable, high‑profile employer amid the startup’s financial collapse.