After chatbot startup Character.AI filed for bankruptcy earlier this week, many of its employees will have the opportunity to take jobs at Disney. A legal filing spotted by Bloomberg and reported by TechCrunch shows Disney agreeing to make employment offers to at least 60 Character.AI employees, the majority of the workforce, paying them an estimated 60 million dollars in annual compensation. The filing says the vast majority of the employees who were offered jobs at Disney accepted them.
The human link is already in place. Character.AI’s former chief executive Karandeep Anand recently became Disney’s first chief technology officer, and the startup previously said Disney had agreed to acquire some of its assets for 20 million dollars.
The filing is candid about why a company with a large and engaged user base failed: it was hobbled by high costs and by potential litigation related liabilities and regulatory engagement. Character.AI was sued by the mother of a 14 year old boy who said her son became obsessed with one of its chatbots before taking his own life, and it faces government investigations over child safety concerns.
The arrangement is a stalking horse bid, so another company could still come forward with a higher offer. For now, the outcome is a familiar one in consumer AI: the product and the standalone company did not survive its costs and legal exposure, but the team is valuable enough for an incumbent with distribution and a balance sheet to absorb.