Disney to hire most of bankrupt Character.AI’s staff, budgeting $60 million a year in pay
A bankruptcy filing shows Disney has offered jobs to 66 Character.AI employees, with estimated annual compensation of $60 million plus a $30 million retention pool, as the chatbot startup winds down under Chapter 11.
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Many employees of Character.AI, the AI chatbot startup that filed for bankruptcy this month, are moving to Disney. According to a legal filing spotted by Bloomberg and reported by TechCrunch on October 18, and earlier by Business Insider, Disney has made employment offers to 66 Character.AI employees, with estimated annual compensation of $60 million.
$180 million over three years
Under the Chapter 11 filing, Disney is also setting aside a $30 million aggregate retention pool to encourage the Character.AI staff to stay. In total, the company expects to spend $180 million on compensation and retention for the group over the next three years.
Of the 66 staff offered jobs, 56 have already resigned from Character.AI, while the other 10 are waiting for the US government to update their work visas. TechCrunch said the filing describes the “vast majority” of employees who received offers as having accepted them.
Asset sale still open to rivals
Disney previously agreed to pay $20 million for Character.AI’s key assets, including some of its IP and technology. Because that is a stalking-horse bid, other companies can submit competing offers until November 20, with the process overseen by a bankruptcy judge.
The filing says that despite its “large and engaged user base,” Character.AI was hobbled by high costs and “potential litigation-related liabilities and regulatory engagement.” The company faced lawsuits from families who alleged their teenagers harmed themselves or died by suicide after using its chatbots, and together with Google settled several child-safety suits earlier this year. It also faces government investigations over child safety.
Disney’s AI push
Character.AI’s former CEO Karandeep Anand became Disney’s first company-wide chief technology officer in mid-September. Business Insider said the hires are part of the AI and technology strategy of CEO Josh D’Amaro, who took over in mid-March. They also come about two weeks after Disney laid off several hundred workers in late September, including some tech staff.
“They’re highly compensated employees. The numbers can be eye-popping, but it’s not that unusual in this space,” entertainment lawyer Corey Martin, who was not involved in the deal, told Business Insider. Disney did not respond to Business Insider’s request for comment.
Sources: TechCrunch, Business Insider, Bloomberg Law. Image: Taylor Hill/FilmMagic; Manaure Quintero/AFP via Getty Images (via Business Insider).
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