Disney has struck a major deal to hire the vast majority of workers from Character AI, one of the most recognizable startups in the artificial intelligence industry. The agreement was made as a stalking-horse bid during Character AI's bankruptcy proceedings, which means another company could still come forward with a higher offer before the process closes. According to court filings, the bulk of Character AI employees who received job offers from Disney have already accepted them, suggesting the workforce is ready to make the move.
Character AI became famous for letting users create and chat with virtual characters powered by large language models. Founded by former Google researchers, the startup attracted millions of users and raised significant funding. Despite its popularity, the company struggled with the enormous cost of running AI models and keeping up with well-funded competitors.
For Disney, this deal represents a fast path to serious AI expertise. The entertainment giant has been looking for ways to weave artificial intelligence into everything from streaming recommendations to theme park experiences and digital content. Hiring an entire team of experienced AI engineers and product builders saves years of recruitment and training.
Because the bid is a stalking horse, the final outcome remains open. A rival bidder could emerge during the auction and disrupt Disney's plans. However, with most employees already agreeing to join Disney, the momentum appears to favor the entertainment giant. If the deal goes through, it will likely stand as one of the biggest AI talent grabs of the year and could encourage other large companies to pursue similar acquihires in the crowded AI startup space.