In a bankruptcy proceeding that kicked off yesterday, Disney has offered to buy some of the technology that powers the controversy-plagued chatbot Character.AI.
Disney is willing to pay $20 million for “a non-exclusive perpetual license” of certain Character Technologies intellectual property, the chatbot maker said in a press release that did not go into much further detail on which assets Disney wanted.
The move may be surprising. In September 2025, Disney joined others in publicly criticizing Character.AI for stealing content and harming kids. Specifically, Disney sent a strongly worded cease-and-desist letter that accused Character Technologies of weaponizing Disney characters “in a way that could damage its brand long term,” Axios reported.
“Character.AI’s infringing chatbots are known, in some cases, to be sexually exploitive and otherwise harmful and dangerous to children, offending Disney’s consumers and extraordinarily damaging Disney’s reputation and goodwill,” Disney wrote at the time.
That scandal ended with Character Technologies wiping all Disney-owned characters from its platform, but since then, Disney has hired former Character.AI chief Karandeep Anand as its first chief technology officer, Deadline reported.
Disney did not respond to Ars’ request for comment on whether the company plans to use Character.AI technology in products for kids.
It’s possible that Disney will be outbid and not acquire any Character.AI intellectual property. But ever since Disney’s potentially lucrative partnership with OpenAI fell through after Sora’s abrupt shutdown, the entertainment giant has been looking for more ways to “get in the AI game and profit from its boom,” Deadline reported. (Meanwhile, OpenAI apparently plans to revive Sora without Disney, insiders told The Information.) So, Disney may be moving early in the hopes of acquiring chatbot technology proven to resonate with its fanbase. It may possibly even take over the platform in a transition that preliminarily would be managed by Character.AI employees, the press release said.
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