Disney offers jobs to 66 Character.AI employees as it expands AI capabilities

The Walt Disney Company has offered jobs to 66 employees of bankrupt chatbot startup Character.AI and placed a US$20 million bid for a licence to some of its technology, as the entertainment giant looks to strengthen its in-house artificial intelligence (AI) capabilities.

According to a bidding procedure motion filed on October 13 in the US Bankruptcy Court for the District of Delaware, Disney expects to spend about US$180 million over three years on compensation and retention for the employees.

This includes an estimated US$60 million in annual compensation and a US$30 million retention pool. A summary of the filing indicates that the vast majority of those offered positions have been accepted.

The move would bring most of Character.AI’s workforce into Disney as the company explores conversational AI applications across its streaming and theme park businesses.

Disney bids US$20 million for Character.AI technology

Disney Worldwide Services has submitted a US$20 million stalking-horse bid for a non-exclusive, perpetual licence to certain Character.AI technology. The proposed deal covers the code behind the startup’s training, safety and serving systems, nine patents and certain company claims.

The licence does not include the Character.AI app, brand, user data, user chats or finished AI models, which remain part of the bankruptcy estate. As the bid serves as an initial offer, other potential buyers can still submit higher bids.

Character.AI expects the sale process to conclude in late November or early December. The company has said its platform will continue operating during the process, although it could be wound down if no buyer agrees to continue it.

The hiring and technology arrangements come after Disney appointed Karandeep Anand, Character.AI’s former chief executive, as its first chief technology officer. Anand was named to the role on September 18 and began work on October 2.

The relationship also follows a legal dispute between the companies. Disney sent Character.AI a cease-and-desist letter in September 2025 over its use of Disney characters.

AI could support Disney’s streaming and parks businesses

Disney’s investment in conversational AI comes as it seeks to use technology across its entertainment, streaming and Experiences businesses. In principle, stronger internal AI capabilities could support customer engagement across Disney+, theme parks and cruises, while helping streamline customer support and content-related workflows.

However, the financial impact will depend on how effectively Disney integrates the technology into its operations and whether the investment translates into measurable improvements in customer experience, productivity or costs.

Character.AI’s legal and regulatory exposure also presents potential risks around AI safety, brand protection and litigation. The proposed licence’s exclusions, including user data, chats and finished models, define the scope of the technology Disney is seeking to acquire.

The transaction therefore represents an expansion of Disney’s technology capabilities rather than an acquisition of the Character.AI platform as a whole.

What the move means for Disney investors

The hiring push adds to Disney’s broader technology investment, but its near-term financial performance will continue to depend on execution across streaming, advertising and its Experiences business.

Analyst estimates cited by Simply Wall St project Disney revenue of US$113.7 billion and earnings of US$13.5 billion by 2029. The outlook assumes continued revenue growth, although softer advertising markets and weaker consumer demand at some Asian parks remain potential risks.

The Character.AI move could give Disney greater control over the development and deployment of conversational AI, but the scale of its eventual contribution to revenue and profitability remains uncertain. Investors will need to assess the technology’s impact alongside Disney’s content spending, streaming profitability and expansion plans for its parks and cruise operations.