Chatbot Platform Character.AI Files For Bankruptcy, Disney To Buy Some Assets
Character.AI has filed for bankruptcy and plans to sell assets to Disney for $20 million. The company faced multiple lawsuits regarding the safety and conduct of its AI chatbots.
Why it matters
This highlights the legal and financial risks facing generative AI startups and the consolidation of AI assets by major media conglomerates.
Chatbot platform Character.AI said on Monday it has filed for bankruptcy in the US and has agreed to sell some assets for $20 million to Walt Disney.The generative AI platform has faced mounting legal challenges over its chatbots. Earlier this year, Character.AI and Alphabet's Google settled a lawsuit by the mother of a 14-year-old Florida boy who killed himself after the startup's chatbot allegedly encouraged him to do so.Kentucky has sued the company, saying its chatbots encouraged users to cut, starve or kill themselves, while Pennsylvania filed a lawsuit alleging its chatbots posed as doctors.According to Character.AI's proposal, Disney will be a "stalking-horse" bidder - an initial prospective buyer - for a non-exclusive perpetual license to some intellectual property. Other bidders can top Disney's offer.Character.AI expects to close the sale of all its assets by late November or early December.
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5 other newsrooms covered this event. We read each version separately.
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