Disney Spends $200 Million on Character.AI Staff and Assets

The Walt Disney Company is investing $200 million to absorb talent and intellectual property from the bankrupt AI chatbot startup Character.AI. As part of a broader AI strategy led by CEO Josh D'Amaro, Disney is paying $60 million annually to 66 former Character.AI employees and allocating $30 million for a retention pool, totaling an expected $180 million spend over three years.

Disney also agreed to pay $20 million for key assets and intellectual property from Character.AI, though the company noted other bidders may submit competing offers by November 20. This move follows the mid-September appointment of former Character.AI CEO Karandeep Anand as Disney's first company-wide tech chief. The investment comes shortly after Disney laid off several hundred workers.

Character.AI filed for Chapter 11 bankruptcy amid significant legal and regulatory challenges. These include lawsuits alleging that the startup's chatbots contributed to teenager self-harm and suicide.