# Character AI Files Bankruptcy as Disney Bids $20m

> Disney offers $20m for Character AI's tech, not company, amid bankruptcy.
- Title: Character AI Files Bankruptcy as Disney Bids $20m | Shortify
- Summary: Disney offers $20m for Character AI's tech, not company, amid bankruptcy. Character AI files for bankruptcy after $2.7bn Google deal, Disney bids $20m for…
- Keywords: character ai, disney, bankruptcy, ai tech, google, character ai shutdown, user data, ai companion chatbots, Startup Fortune
- Source: Startup Fortune — https://startupfortune.com/characterai-files-for-bankruptcy-as-disney-bids-20-million-for-its-characters
- Published: 2026-11-04T20:58:38+00:00
- Read time: 1 min
- Topics: character ai, disney, bankruptcy, ai tech, google, character ai shutdown, user data, ai companion chatbots, startups, business
## Character AI Files Bankruptcy
Character Technologies filed for Chapter 11 bankruptcy in Delaware on October 12, 2026.
## Disney Bids $20m for Tech
Disney offers $20 million for a nonexclusive, perpetual license to ai technology and patents, not the company.
## User Base and Losses
Character AI had 12 million active users but reported monthly losses of $8 million to $9 million.
## Bankruptcy Auction Details
A November 20 bid deadline and November 23 auction set a $21.7 million minimum bid for assets.
## Legal Challenges
39 states and DC filed for data protection rules in bankruptcy court over user data concerns.
## Google Deal Impact
Google's $2.7 billion licensing deal in August 2024 brought co-founders back but stripped core engineering team.
## Suicide Lawsuits
Character AI faced lawsuits over teen suicides linked to chatbot use, including a kentucky case.
## Data Privacy Concerns
Attorneys general want age verification, chat history limits, and user data deletion guarantees.
## Key takeaway

Character AI files for bankruptcy after $2.7bn Google deal, Disney bids $20m for its AI tech.