Disney has asked Character.AI to consider bankruptcy as part of a legal settlement. The entertainment giant wants access to the startup’s trust and safety technology.
Dozens of states have alleged that Character.AI’s chatbots encouraged minors to self-harm and kill their parents. The allegations form the backdrop of the dispute between the two companies.
Disney is seeking intellectual property from Character.AI, including its safety tools. The request came during settlement discussions tied to ongoing lawsuits.
The proposed bankruptcy option would function as a legal shield for the startup. It could limit liability while allowing Disney to acquire key assets.
Character.AI has faced mounting scrutiny over how its chatbots interact with young users. State attorneys general have raised concerns about harmful outputs.
The startup has not publicly confirmed whether it will accept the terms. Details of the settlement talks remain limited.
The case highlights growing pressure on AI companies to safeguard minors. It also shows how major entertainment firms are positioning themselves in the AI space.
