I wrote about Character.AI’s Chapter 11 filing and Disney’s $20 million bid last week. Now the staffing side of that deal is on the record: Disney has agreed to offer jobs to at least 60 Character.AI employees. Per the filing, that is the majority of the workforce, and the estimated annual compensation comes to $60 million.
60 offers, and almost all accepted
The filing, spotted by Bloomberg, also records that the vast majority of those offered jobs took them. For a bankrupt company that is the part that counts: products are hard to value in a proceeding like this one, a team is not.
The former CEO is already at Disney
A personnel move just before this fits neatly. Karandeep Anand, until recently Character.AI’s chief executive, is now Disney’s first CTO. When you already know the people you’re hiring, the selection doesn’t need a long review.
A stalking horse bid can be topped
None of it is final. Disney’s offer is a stalking horse bid: a first offer that sets the frame and that another company can beat. The staff having already accepted makes a higher bid less appealing for anyone else, though — outbid Disney now and you’re mostly buying technology without the people behind it.
It wasn’t the compute bill that killed Character.AI
The reasoning in the filing is the interesting part. It credits the company with a large and engaged user base. What broke it, per the filing, was high costs and “potential litigation-related liabilities and regulatory engagement.”
The background there is well known and grim: the mother of a 14-year-old who died by suicide sued the company, and several agencies are investigating child safety. That makes Character.AI the first sizeable case where compute costs weren’t the deciding factor — the legal exposure of a product that binds people to a character was. For anyone building companion products, that now sits as a number in a bankruptcy filing.
If any of this is close to home: in the US, the 988 Suicide and Crisis Lifeline is reachable by call or text at 988, around the clock.