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Character.AI: Chapter 11 and asset sale

This dossier follows the US Chapter 11 proceeding initiated by Character Technologies, the operator of Character.AI. It covers the search for a buyer, bids for its assets and documented consequences for the chatbot platform’s continued operation.

Last updated : 1 key moments

Where things stand

As of 14 October 2026, Character.AI entered Chapter 11 in Delaware on 12 October. Disney offers $20 million for certain rights and claims, subject to better bids. The company says it will maintain the service during the proceeding; longer-term continuity depends on finding a buyer.

Confirmed

Character.AI enters Chapter 11 and seeks a buyer

Character Technologies, the operator of chatbot platform Character.AI, filed for Chapter 11 protection on 12 October 2026 in Delaware, United States. The proceeding is intended to enable a court-supervised sale; the company says it will keep the service running while it seeks a buyer.

According to Character.AI’s statement, Disney has agreed to pay $20 million for a non-exclusive perpetual licence to certain intellectual property and certain claims. Reuters, which reviewed court documents, reports that Disney would be the initial prospective bidder and that other bidders can make a better offer. This is therefore not a completed acquisition of the platform.

The company attributes its decision to legal, regulatory and operational difficulties. It expects to complete the sale process in late November or early December 2026; that timetable remains a forecast. On its blog, it says subscriptions and billing are unchanged for now.

According to Character.AI, the service’s longer-term continuation depends on an offer that would keep the platform operating. Otherwise, it would be wound down. The sources reviewed do not establish a buyer ensuring that continuity or a final sale.

Sources 3