Disney is offering $20 million for a slice of Character.AI’s technology—the same chatbot company it accused last year of putting children and Disney’s brand at risk. The proposal surfaced as Character Technologies, Character.AI’s maker, entered bankruptcy proceedings. It is a striking turn in a dispute that once ended with Disney characters disappearing from the platform.
The offer is for “a non-exclusive perpetual license” to certain Character Technologies intellectual property, according to the company’s press release. That wording matters: Disney is proposing long-term permission to use specified technology, not announcing that it has bought Character.AI outright. The release did not detail which assets Disney wants, and the company may be outbid. For now, this is an offer, not a completed transaction—or a disclosed plan for what Disney would build with the tech.
From cease-and-desist to potential buyer
In September 2025, Disney sent Character Technologies a cease-and-desist letter accusing it of using Disney characters in a way that could damage the company’s brand, Axios reported at the time. Disney said some of the chatbots were “sexually exploitive” and otherwise harmful and dangerous to children. Those were Disney’s allegations, not findings established in the bankruptcy announcement. The fallout did, however, include Character Technologies removing Disney-owned characters from its platform.
Since then, Disney has hired former Character.AI chief Karandeep Anand as its first chief technology officer, Deadline reported. The company did not respond to Ars Technica’s question about whether it intends to use Character.AI technology in products for children. That unanswered question is not a minor footnote: a company considering licensing chatbot technology after raising child-safety concerns should explain what safeguards and uses it has in mind.
Disney’s interest also fits its broader push to find a place in generative AI. A potentially lucrative partnership with OpenAI fell through after Sora was abruptly shut down, and Deadline reported that Disney has been looking for ways to enter the AI business and profit from its growth. The Information, citing insiders, reported that OpenAI apparently plans to revive Sora without Disney. In other words, Disney’s hunt for AI options is unfolding while one high-profile collaboration has already gone nowhere.
Character.AI technology could appeal to an entertainment company looking for interactive ways to connect audiences with fictional characters. That is a plausible reason for the bid, not a confirmed product plan. The company’s release also said Character.AI employees would preliminarily manage a possible transition that could include the platform, but the details remain uncertain.
There is a real distinction between acquiring a license and adopting a technology responsibly. Disney’s $20 million offer signals that Character.AI’s underlying tools may still have commercial value, even after a bruising public dispute. Whether that value turns into useful, safe experiences—or simply a new license for the same old chatbot headaches—depends on the assets, safeguards and eventual deal. The fine print is doing a lot of work here.
Sources: Glitch Please! and Ars Technica — https://arstechnica.com/tech-policy/2026/10/disney-offers-20m-for-character-ais-scandal-plagued-chatbot-tech/ — Source article; reports on the offer, bankruptcy proceeding, prior Disney allegations, and related company developments.
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