Disney has offered $20 million for a non-exclusive perpetual license to specific intellectual property from Character Technologies. The chatbot developer is currently undergoing a bankruptcy process, with estimated assets and liabilities ranging between $50 million and $100 million.
The potential acquisition follows a period of conflict between the two companies. In September 2025, Disney issued a cease-and-desist letter to Character Technologies, accusing the firm of using Disney-owned characters in ways that could harm the brand and children. Character Technologies subsequently removed these characters from its platform.
Disney is seeking to expand its presence in the artificial intelligence sector following the collapse of its partnership with OpenAI. The company recently appointed Karandeep Anand, the former chief of Character.AI, as its first chief technology officer.
Character Technologies faces multiple legal challenges, including lawsuits from the states of Kentucky and Pennsylvania, as well as a case involving the death of a 14-year-old user. The company reported that these legal liabilities and high development costs contributed to its inability to maintain cash flow.
The sale process is expected to conclude by late November or early December 2026. While Character Technologies has stated that the platform will remain online for now, it noted that a failure to find a buyer could lead to a total shutdown of the service.
