Disney is adding a large portion of the workforce of the well-known AI startup Character.AI to its ranks: according to documents filed with the Delaware bankruptcy court, the company agreed to make employment offers to at least 60 of the startup's employees and set aside about $60 million for their annual compensation. The details became public through court filings — Bloomberg spotted them first, and on October 18, 2026, TechCrunch reported on them.
This agreement continues the Character.AI bankruptcy process that began on October 12: six days after the startup filed its voluntary Chapter 11 petition, the fate of its team has also been decided.
Key Terms of the Offer
According to the documents, Disney has committed to making employment offers to at least 60 Character.AI employees — the majority of the startup's total workforce. Compensation is estimated at about $60 million per year. It is noted that the "vast majority" of employees who received offers accepted Disney's offer — meaning the deal's terms did not stay on paper but were confirmed in practice.
The offers were included in the court filings as an integral part of the agreement between the companies. The employment terms thus became part of the official court-supervised process, and their enforcement will likewise be monitored by the court.
The number of acceptances exceeded the proposed minimum: according to Bloomberg, citing the contract's text, the three-year budget covers roughly 66 employees. Disney therefore prepared a package that goes beyond its minimum obligations to cover even more staff.
Financial Details
Bloomberg's October 17 newsletter summarizes the bankruptcy term sheet: Disney budgeted about $180 million over three years for roughly 66 employees. This matches the $60 million annual compensation figure — stretched over three years, it produces exactly that sum.
Additionally, a separate $30 million aggregate retention fund was created to keep employees on board. This fund sits outside the main compensation package.
"Disney budgeted about $180 million over three years for roughly 66 Character.AI employees, with a separate $30 million aggregate retention pool." — Bloomberg newsletter, 2026-10-17
Disney is therefore setting aside not only $180 million in direct compensation over three years to bring over most of the startup's team, but also an additional $30 million retention fund. The total package approaches $210 million.
Notably, the figures from the two sources confirm each other: the $60 million annual estimate in the court documents fully matches the $180 million three-year budget reported by Bloomberg. The deal's terms appear identically in two independent documents.
Current Status of Employees
According to the documents, of the 66 employees who accepted Disney's offer, 56 have already formally resigned. The remaining 10 are waiting for updates to their US work visas — once their paperwork is finalized, they will join the Disney team as well.
These figures show broad employee support for the offer: the documents emphasize that the "vast majority" accepted. With most recipients agreeing, a large part of the startup's team is moving almost entirely into Disney.
History of the Bankruptcy Process
The timeline unfolded as follows: on October 12, 2026, Character.AI filed its voluntary Chapter 11 bankruptcy petition. A day later, it was announced that the startup's former CEO, Karandeep Anand, had taken the role of chief technology officer (CTO) at Disney — the first in the company's history — and would lead Disney's AI strategy.
At the same time, Disney had previously made an initial (stalking-horse) bid of $20 million for some of Character.AI's assets — a deal previously covered by Aishunos. On October 17, Bloomberg disclosed the contract's financial details, and on October 18, TechCrunch published the job-offer data, citing court documents.
Disney's $20 million initial bid covers training, safety and serving code plus nine patents. The app, brand, user data, chats and finished models remain in the bankruptcy estate — meaning Disney is getting not the product itself, but the team that built it and its technological foundation.
Because the bid is in stalking-horse form, TechCrunch notes that another company could make a higher offer — the sale process is not yet complete.
