Character.AI

A Chapter 11 court filing shows Disney paying roughly 9x more for former Character.AI staff ($180 million in retention over three years for about 65 employees) than for the company's actual IP ($20 million for a non-exclusive license) — with CEO Colin Adams warning the platform will be wound down entirely absent a rival bidder.

Files for Chapter 11 bankruptcy, citing "significant legal, regulatory and operational headwinds," after Kentucky and Pennsylvania attorneys general sued over child-safety harms — a case study in state enforcement, not federal rulemaking, setting the real limits on consumer AI.