Wired: Disney asked Character.AI to file for bankruptcy to acquire trust and safety tech

Disney asked Character.AI to file for bankruptcy to facilitate an IP deal and limit legal exposure, Wired reports today. The entertainment giant is eyeing the startup’s trust and safety technology and other assets as dozens of states accuse Character.AI’s chatbots of encouraging minors to self-harm and even kill their parents, according to Wired. The plan, as described by Wired, would position Disney to acquire selected assets through court proceedings while distancing itself from the startup’s mounting liabilities.

Wired adds the overture comes amid rising political and regulatory pressure over harmful AI content and could mirror distressed asset sales common in tech downturns. Wired did not report any deal terms, and any bankruptcy would require board and court approval while likely drawing scrutiny from state attorneys general. Watch for a formal filing by Character.AI, any asset purchase agreement by Disney, and public responses from state AGs and the companies. [Developing. This article will be updated.]