Disney to hire 66 Character.AI staff at $60M a year

Disney has agreed to hire most of Character.AI's staff, the chatbot startup that filed for bankruptcy on October 12, 2026. Court filings put the pay for those workers at about $60 million a year, three times the $20 million Disney is offering for the company's technology.

The split matters because it shows where the value of a failed AI startup now goes. Most of the money follows the people, not the company or its creditors.

How many people are moving

TechCrunch reports that Disney agreed to make job offers to at least 60 Character.AI employees, "the majority of the workforce." It says the "vast majority" of those offered jobs accepted, citing the court filing.

PPC Land and Laughing Place, reading the same filings, give a higher count. They report that 66 of the company's 86 employees are leaving for Disney, and that 18 remain at Character.AI. The terms Disney filed describe "roughly 65" offered employees, so the counts differ slightly between documents.

There is already a link at the top. Karandeep Anand, Character.AI's former chief executive, became Disney's first chief technology officer last month, Laughing Place reports.

What Disney pays, and to whom

The numbers come from Disney's term sheet, as quoted by PPC Land:

Item	Amount
Yearly pay for the hired staff	About $60 million
Retention pool for the same staff	$30 million
Pay and retention over three years	About $180 million
Cash for the license, paid to Character.AI	$20 million
Up-front, non-refundable part of that	$5.5 million
Break-up fee if another bidder wins	$700,000

"Disney estimates the annual run rate total compensation of the Offered Employees to be approximately US$60 million," the term sheet says. It adds that this money "will not constitute consideration payable to the Company." In plain terms, the salaries go to the workers. Creditors only share in the $20 million.

This is a reverse acqui-hire. A big company hires a startup's team and licenses its technology without buying the company itself. Google did something similar with Character.AI in 2024, when it rehired the founders, as we reported when Character.AI filed for bankruptcy.

What the $20 million buys

Disney's offer is a stalking-horse bid, which sets a floor that other buyers can try to beat. According to PPC Land, the license is non-exclusive and perpetual. It covers code for Character.AI's training, safety and serving systems, plus nine patents.

It leaves out the parts users care about most. The app, the brand, user data, chats, training data and finished models all stay with the bankrupt company for other bidders. PPC Land reports the filings list about 163 million current and past users.

Rival bids must top $21.7 million. PPC Land puts the bid deadline at November 20, an auction on November 23 and a sale hearing on November 24. If no qualifying bid arrives, the deal goes ahead without an auction. "Character's platform will be wound down," the company's motion says.

Until then, Disney's new staff keep the platform running at no charge through February 18, 2027, PPC Land reports.

Pressure from regulators

Child safety hangs over the sale. TechCrunch notes that the company faces a lawsuit from a mother whose 14-year-old son died by suicide after becoming obsessed with a chatbot, plus government investigations into child safety.

Several state attorneys general have asked the bankruptcy judge to protect user data, especially data on minors, for whoever wins the auction, Laughing Place reports. The hiring also follows a Disney layoff of several hundred jobs, some in its tech divisions.

What this means for developers

For people who build on, invest in or work at AI startups, this deal is a template worth studying:

• Creators on Character.AI should export now. The platform runs during the sale, but the filings say it will be wound down if no rival buyer appears. Save characters and chat histories before November 20.
• Read the value split before you join or fund a startup. Here, staff contracts are worth about nine times the license fee over three years. Equity holders and lenders recover only from the smaller number.
• Expect conditions on any user-data buyer. The chats and user records are still for sale, and state attorneys general are already asking the court to protect minors' data. A buyer should plan for limits on how that data can be used.
• Watch the November 20 deadline. A rival bid above $21.7 million could keep the app alive under a new owner. No bid means a shutdown and a Disney team with the same engineers, working on Disney's products instead.