Disney has decided to recruit most employees of AI chatbot startup Character.AI, which has applied for bankruptcy protection. The move is seen as a strategy to secure technology and key talent at the same time to strengthen its own AI capabilities.

On Oct. 18, TechCrunch reported that Disney recently agreed to make job offers to at least 60 Character.AI employees. The total annual compensation to be paid to them is estimated at about $60 million.

Documents submitted to a U.S. court show that most of the employees who received offers accepted jobs at Disney. Disney had earlier agreed to a plan to secure some Character.AI assets for $20 million.

Ahead of the hiring push, former Character.AI CEO Karandeep Anand (카란딥 아난드) joined Disney in September as its first chief technology officer. Disney will secure personnel to apply generative AI technology to content and digital services through the move.

The asset acquisition deal has not been finalised. Disney is taking part in the bankruptcy court sale process as a stalking horse bidder with preferential negotiating status. If another company offers a higher price, the counterparty could change.

Character.AI grew as a chatbot service that lets users create and talk with virtual personas, but it ran into management difficulties due to high operating costs and legal disputes.

Child safety issues, in particular, emerged as a major burden. Character.AI became embroiled in a lawsuit by a mother who claims her 14-year-old son's death was influenced by interactions with the chatbot, and it has also been subject to government investigations related to child protection.

Character.AI on Oct. 13 applied for bankruptcy protection under Chapter 11 in the United States. It is now proceeding with an asset sale process under court supervision.

The deal is drawing attention as a case in which a large company secures technology and talent as AI startups face difficulties sustaining their businesses. It is not yet final whether Disney will complete the asset acquisition and how Character.AI's service will be operated going forward.