Character.AI filed for Chapter 11 bankruptcy in the US, agreeing to sell assets to Disney for $20 million. Disney is designated as the primary bidder with this offer serving as the minimum auction price, allowing other parties to bid higher. The company will maintain operations during the disposal period, with a contingency plan to shut down if no full platform buyer emerges. The transaction is expected to close between late November and early December 2026, reflecting broader commercialization challenges in the chatbot industry.