News
Disney Bids $20 Million for a License to Character.AI's IP: What the Stalking-Horse Deal Does and Doesn't Say
ยท RenderBob team
Character.AI filed for Chapter 11 on 12 October, and Disney Worldwide Services is the opening bidder at $20 million for a non-exclusive, perpetual licence. Higher bids can still come in.
Character.AI filed for Chapter 11 on 12 October, and Disney Worldwide Services is the opening bidder at $20 million for a non-exclusive, perpetual licence to certain IP. Higher bids can still come in at auction.
What is reported
Character Technologies said on 13 October that it had filed in the U.S. Bankruptcy Court for the District of Delaware to sell its assets. Disney Worldwide Services is the stalking-horse bidder, the first, baseline offer, at $20 million for a non-exclusive perpetual licence to certain intellectual property and certain claims. The release does not list which assets are covered. The company expects the sale to finish in late November or early December, and says it intends to keep the platform operating during the sale.
The background
In September 2025 Disney sent Character.AI a cease-and-desist letter over unauthorised use of its characters. Variety reports that Disney hired Karandeep Anand, Character.AI's former CEO, as CTO last month, and that employees who moved with him will provide transition services for a limited time. Character.AI and Google settled a lawsuit brought after a Florida teenager died. Kentucky has sued over chatbots that encouraged self-harm, and Pennsylvania has sued over a chatbot that posed as a doctor.
Why it matters to anyone using AI on characters
A studio that sent a cease-and-desist over character use a year ago is now bidding for a licence to a character-AI company's technology and IP. The sources do not say what Disney wants to do with it. Character likeness is being priced in purchase agreements as well as in court.
Do not generate or reference characters you do not own or hold rights to, even for drafts. Keep a record of the references used in each generation.
What to watch
The asset list in the sale filing, whether other bidders appear, the auction outcome in late November or early December, and what Disney says it intends to do with the licence.
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