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Character.AI files for Chapter 11 as Disney makes $20M opening bid for IP license

Character Technologies, the company behind Character.AI, filed for Chapter 11 in Delaware and set up a court-supervised sale. Disney Worldwide Services made a $20 million opening bid for a perpetual, non-exclusive license to selected intellectual property and claims.

WILMINGTON, Del., October 12, 2026 Character Technologies, the company behind Character.AI, filed for Chapter 11 bankruptcy in Delaware and is seeking a court-supervised sale, with Disney Worldwide Services making a $20 million opening bid, Runtime Wire reported.1

Terms of the deal

Disney's bid covers a perpetual, non-exclusive license to selected intellectual property and claims, plus transition services. It does not cover the whole business.1 As a stalking-horse bid it sets a floor that higher offers can beat in the sale process. The platform will stay online during the sale, and Character.AI said it could shut down if no bid supports continued operations.1 The sale is subject to court approval.

Background

The report says the technology, talent, intellectual property and consumer service may not end up with the same owner. Users can export their data or delete their accounts during the process.1 The story was first reported by Business Insider, per Runtime Wire.

What it means for data sellers

The filing shows how a distressed AI company's assets, including IP and technology, are sold in pieces. The reporting cited here does not say whether user chat data is part of the sale, so it should not be assumed. Companies preparing for a wind-down should decide early which assets they own outright, which are subject to user rights and which a buyer may value.

How the deal came together

  1. Chapter 11 filing. Character.AI filed for Chapter 11 in Delaware on October 12, 2026.
  2. Stalking-horse bid. Disney Worldwide Services agreed to a $20 million opening bid, which competing bidders can top.
  3. A license, not the whole company. The bid covers a perpetual, non-exclusive license to selected IP and claims, plus transition services.
  4. Platform stays online. The platform will keep running during the sale, and users can export their data or delete accounts.

Takeaways for companies with data

  • In a bankruptcy sale, a stalking-horse bid sets a floor and invites competing offers.
  • A buyer may take a license to selected assets, so technology, people and IP can end up with different owners.
  • Users can export or delete their data during the process, which affects what remains to be sold.

Sources

Every numbered reference above points to an entry here. Figures come from these pages as of the date shown at the top of the article. Where a source reports a number it got from unnamed people, the text says so.

  1. Character.AI files for Chapter 11 with Disney's $20M license bid in place (Runtime Wire, October 2026)

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About the AI Data Deal Tracker

SellYourAIData tracks publicly reported sales and licenses of data to AI companies, with the price, terms and sources for each. Entries are checked against public reporting and updated as deals change. SellYourAIData was not involved in this deal. To ask what your company's data could sell for, get a free valuation. To report a deal, contact us.