Character AI Files for Bankruptcy as Disney Bids $20M for IP License
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Character Technologies, once a $2.5 billion AI chatbot platform, filed for Chapter 11 bankruptcy protection on October 12, 2026, with Disney Worldwide Services opening the auction with a $20 million offer for certain intellectual property and transition services. The move marks a dramatic reversal for the startup, which peaked at a $2.5 billion valuation in 2024 but lost roughly 8 million monthly active users and shed about 60 percent of its value by mid-2026.
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