Following Character.AI’s bankruptcy filing earlier this week, many of its employees are set to transition to roles at Disney.
Character.AI’s former CEO, Karandeep Anand, has joined the entertainment giant as its first Chief Technology Officer. The startup previously stated that Disney agreed to acquire certain assets for $20 million.
A legal filing reviewed by Bloomberg provides further details on the agreement, showing that Disney has agreed to extend employment offers to at least 60 Character.AI employees—the majority of its workforce—with an estimated $60 million in annual compensation.
The filing also indicates that the “vast majority” of Character.AI employees who were offered positions at Disney accepted them. However, as this is a stalking horse bid, another company could potentially submit a higher offer.
The document notes that despite maintaining a “large and engaged user base,” Character.AI has been constrained by high operating costs and “potential litigation-related liabilities and regulatory engagement.” The company is facing a lawsuit brought by the mother of a 14-year-old boy who alleged her son became obsessed with one of Character.AI’s chatbots before dying by suicide, in addition to government investigations regarding child safety concerns.