Character.AI Seeks Court-Supervised Sale Amid Bankruptcy Filing
- Character.AI filed for voluntary Chapter 11 bankruptcy in Delaware on October 12, aiming for a court-supervised sale.
- Disney is the opening bidder, offering $20 million for a non-exclusive perpetual license to some of Character.AI’s intellectual property.
- The company has pointed users toward mental health resources amid the uncertainty of its app’s future.
- Character Technologies Inc., the company’s legal name, estimated its assets and liabilities at $50 million to $100 million.
- The sale is expected to close in late November or early December if a buyer commits to keeping the service alive.
Character.AI’s bankruptcy filing follows significant financial and operational challenges, including an operating loss of approximately $8-9 million per month and difficulties in raising new capital. The app remains online for now, with subscriptions active as the company seeks buyers under court supervision.
If no buyer agrees to maintain Character.AI’s operations, the platform may be shut down, impacting millions of users who rely on AI companions for daily interaction. Source
