Disney is paying employees at an AI chatbot startup that filed for bankruptcy, shortly after cutting its own tech workforce.
The Mouse House plans to pay $60 million a year to 66 Character.AI workers, according to a Chapter 11 filing filed Tuesday by its parent company. In mid-September, Disney hired Karandeep Anand, CEO of Character.AI, to become its first-ever company-wide technical lead. (The company has not yet revealed how much it pays Anand.)
The additions are part of Disney’s AI strategy under CEO Josh D’Amaro, who has invested in the media giant’s technology platforms to help revive a stagnant stock that is up less than 2% over the past 12 months and down more than 36% over the past five years.
Disney’s decision to bring in these Character.AI employees came two weeks after laying off several hundred workers, including some technical employees. The late September job cuts mark Disney’s third major round of layoffs since D’Amaro took office in mid-March.
In addition to the $60 million in compensation, Disney is setting aside another $30 million for a “global retention pool” to incentivize Character.AI employees to stay. The company plans to spend $180 million on “total compensation and retention” for those employees over the next three years, the filing said.
Of the 66 Character.AI employees who were offered jobs by Disney, 56 have already resigned from the AI startup, while the remaining 10 are waiting for the US government to update their work visas.
Entertainment lawyer Corey Martin of Granderson Des Rochers, who advises companies on media transactions, said he was not surprised by these compensation figures since Character.AI’s employees are its greatest asset.
“These are highly compensated employees. The numbers can be staggering, but it’s not that unusual in this business,” said Martin, who did not work on the deal or with Disney.
Disney also agreed to pay $20 million for Character.AI’s core assets, including some of its intellectual property and technology. Other companies may submit competing bids for the assets by November 20. The entire process will be overseen by a bankruptcy court judge. Disney did not respond to requests for comment for this story.
Character.AI filed for bankruptcy after facing lawsuits from families who alleged their teenagers harmed themselves or committed suicide after using the company’s custom AI chatbots. The AI startup and Google, one of its backers, settled several child safety-related lawsuits earlier this year.
Disney sent a cease and desist letter to Character.AI last fall, telling it not to create AI chatbots featuring its copyrighted characters without permission. Character.AI complied, removing chatbots with characters from Disney franchises like Star Wars and Marvel.
In its bankruptcy announcement, Character.AI said it had faced “significant legal, regulatory and operational headwinds.”
Anand told Disney employees in a memo last Friday that Mouse House was “uniquely positioned to win” in a competitive media industry that he said was “at an inflection point.” The technical lead also said he enjoyed meeting his new colleagues and was looking forward to working with them.
“What stands out most is the talent and care this team puts into their work, the craftsmanship that Disney has perfected and the strong foundation you have built,” Anand said.
Gn bussni
