Character.AI has filed for Chapter 11 bankruptcy, listing liabilities between $50 million and $100 million. Disney, as lead "stalking horse" bidder, made the first offer of $20 million on the company's assets, with the sale expected to close by early December. The startup previously lost co-founders Noam Shazeer and Daniel De Freitas to Google and its former CEO to Disney, and faced legal actions from Pennsylvania and Texas over chatbot claims. Services continue pending a buyer.
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