AI-rewritten: This is a summary of an article from Ars Technica, rewritten by AI (Qwen, running locally) to make it easier to read. The facts come from the original article – read it for the full story.

---

Disney is offering $20 million for a non-exclusive perpetual license of certain intellectual properties from Character Technologies, the maker of the chatbot platform Character.AI. The company stated it would pay this amount for specific assets but did not detail exactly which technologies were included in the deal. This offer comes after Disney publicly criticized Character.AI in September 2025 for allegedly using its characters in ways that could harm children and damage Disney’s reputation.

Character Technologies filed for bankruptcy yesterday to maximize shareholder value, citing high development costs and litigation liabilities as reasons it cannot currently support its business. The company has over 20 million monthly active users and has faced lawsuits alleging harms such as encouraging self-harm or impersonating doctors. While the platform remains online, Character.AI warned that if no buyer is found, services could shut down due to potential legal risks.

The sale process may conclude by the end of November or early December 2026. Character Technologies listed estimated assets and liabilities between $50 million and $100 million. Although Disney has hired a former Character.AI executive as its new chief technology officer, the company has not confirmed if it plans to use the chatbot technology in products for children. Potential buyers may be cautious because transitioning the service could impact platform safety, a point noted in the bankruptcy filing.