Character.AI, the app where millions of people chatted with AI versions of their favorite characters, has just filed for bankruptcy.
The company that once looked like the future of fun AI companions is now in a court supervised sale, and the first bid comes from the very company that once threatened legal action over it, Disney.
Disney is offering around 20 million dollars for some of the company's assets and a license to its technology. The filing says Character.AI owes somewhere between 50 and 100 million dollars, so the gap is hard to miss.
The irony is loud. Disney spent years furious about users recreating its characters on the platform. Now it wants to buy what is left with a non exclusive license. It also recently hired Character.AI's former chief as its own technology boss.
For now the platform stays online, and paid subscriptions keep running like before. The company says the sale should wrap up by early December. If nobody steps up to keep it alive, it will simply shut down.
It is a stunning fall for a startup that once felt like the internet's favorite toy.
A chatbot app that was adored by millions is now selling its pieces to the studio it spent years fighting. Five years is all it took.
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