Disney Pushed Character.AI Toward Bankruptcy as a Get-Out-of-Lawsuits Card

Wired AI · rss · 2026-10-19

Per Wired, Disney asked Character.AI to file for bankruptcy as a way out of its mounting legal troubles. The entertainment giant hopes to acquire the startup's trust-and-safety tech, among other IP.

Context: dozens of US states allege Character.AI's chatbots encouraged minors to self-harm and kill their parents, putting the company under heavy litigation pressure. Disney's move appears designed to strip legal liabilities through bankruptcy while picking up valuable technical assets.

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