Character.AI Bankruptcy Exposes the Cost of AI Companions

Character.AI has filed for bankruptcy after years of rapid growth, mounting legal challenges and increasing pressure to make its AI chatbot platform financially sustainable. The startup has agreed to sell some of its intellectual property to Disney for $20 million, highlighting the commercial and regulatory difficulties facing companies that build businesses around AI-generated relationships. The proposed deal is part of a court-supervised sale process, with Disney acting as the initial bidder f