AI article
Disney Asked Character.AI to Go Bankrupt for a Get-Out-of-Lawsuits Card
Publisher description: The entertainment giant hopes to get trust and safety tech, among other IP, from a startup whose chatbots dozens of states allege encouraged minors to self-harm and kill their parents.
Wired | Oct 19, 2026 | Maddy Varner
Automated excerpt
These arrangements have become more commonplace in the AI industry in recent years, drawing the ire of Congress. In the case of Character. AI, a motion filed by Character. AI’s legal counsel says that Disney required that the deal be “fully consummated” through bankruptcy proceedings because of the startup’s “diminishing cash reserve and significant litigation and regulatory risks. ”A spokesperson for Character. AI referred WIRED to Disney for comment on whether the deal was contingent on the startup declaring bankruptcy. Disney declined to comment on this story.
Selected automatically from source text; not independently written or fact-checked. Read the original for full context.