By Hamza Faisal
Disney is hiring the brain trust behind one of the internet's most popular chatbot apps. The entertainment giant has agreed to make employment offers to at least 60 Character.AI employees — the majority of the bankrupt startup's workforce — at an estimated $60 million a year in compensation, according to details from Character.AI's Chapter 11 bankruptcy filing spotted by Bloomberg.
The "vast majority" of employees offered jobs have already accepted them, the filing says. The catch: Disney's agreement is a stalking-horse arrangement, meaning another company could still come forward with a higher offer for the startup's assets and talent.
The move extends a relationship that deepened last month, when Character.AI's former chief executive Karandeep Anand joined Disney as its first company-wide chief technology officer. Anand's appointment, announced in September and effective October 2, put him in charge of Disney's enterprise technology, data and AI platforms.
A $180 million bet over three years
The payroll commitment is only part of the package. Disney is setting aside another $30 million for an "aggregate retention pool" to keep the incoming staff from leaving, bringing the total expected spend on compensation and retention to $180 million over three years.
Business Insider reports that 66 staffers were offered jobs, and that 56 have already resigned from Character.AI while the other 10 wait on updates to their US work visas. "Character.AI's employees are its biggest asset," entertainment lawyer Corey Martin told the outlet — an assessment Disney's wallet clearly endorses.
The talent grab sits alongside a $20 million bid for the startup's technology assets, already placed as part of the bankruptcy auction. The proposed deal would give Disney a non-exclusive license to specified intellectual property; the Character.AI app, brand, user data and conversations are excluded from that license. Competing bids are due November 20, and the sale could close in late November or early December if the court approves.
Why Character.AI collapsed
Character.AI filed for Chapter 11 on October 12, citing what it called "significant legal, regulatory, and operational headwinds." Despite what the filing describes as a "large and engaged user base," the company was hobbled by high costs and mounting legal exposure: families have sued the company over the safety of minors using its chatbots, and it faces government investigations into child-safety practices.
The startup, backed by Google, settled several child-safety cases earlier this year. Google itself struck a $2.7 billion deal in October 2024 that brought Character.AI's founders, some staff and a license to its models in-house — a prelude to this week's near-total absorption of the remaining team.
The awkward timing
The hiring spree lands just two weeks after Disney laid off several hundred of its own workers, including some in its technology divisions. The late-September cuts were the third major round of layoffs since Josh D'Amaro took over as CEO in mid-March, even as the company doubles down on the technology investments he says will jumpstart Disney's business.
Several state attorneys general have meanwhile asked the bankruptcy judge to build privacy protections into any sale, arguing that user data — particularly data belonging to minors — must be safeguarded no matter who wins the auction.
By Hamza Faisal
