Disney expects to spend about $180 million over three years on pay and retention for more than 60 people it hired from Character.AI, according to Bloomberg, which reported the figure on October 17. That comes on top of the $20 million Disney bid in Character.AI's bankruptcy for a non-exclusive license to some of its technology. Character.AI filed for Chapter 11 on October 12.
What the court filings confirm
A declaration by Character.AI's investment banker, Houlihan Lokey, filed in the Delaware bankruptcy court on October 13, says Disney agreed to hire the majority of Character.AI's workforce, including its chief executive, before the company filed. Disney made offers to some employees, and the vast majority accepted. Disney will make those people available to Character.AI for up to five months, at no charge for their time, so the platform can keep running safely during the sale. Disney also paid $7.5 million of the $20 million up front, including a $2 million refundable deposit.
Disney announced on September 18 that Karandeep Anand, then Character.AI's CEO, would become its first chief technology officer from October 2, and that a number of Character.AI's technical team were expected to join. Character.AI is now led by Colin Adams.
The $20 million bid is a starting point: other buyers can make higher offers in the court-supervised sale. Character.AI expects the sale to be completed in late November or early December.
What it means for Character.AI users
For now, nothing changes. Character.AI says the platform is running, paid subscriptions are active, billing is unchanged, and subscribers will be told in advance about changes to paid features. But Disney's bid is for a license to technology, not for the app itself, and Character.AI says the platform will be wound down if the sale does not produce a buyer that keeps it going. With most of the team already working for Disney, export your characters and chats now if you want to keep them. Our Character.AI card has the details and alternatives to consider.