In a bankruptcy proceeding that kicked off yesterday, Disney has offered to buy some of the technology that powers the controversy-plagued chatbot Character.AI, offering $20 million for a non-exclusive perpetual license of certain intellectual property. The move may be surprising, as Disney publicly criticized Character.AI for stealing content and harming kids in September 2025, sending a strongly worded cease-and-desist letter accusing the chatbot maker of weaponizing Disney characters in a way that could damage its brand long term.

That scandal ended with Character Technologies wiping all Disney-owned characters from its platform, but since then, Disney has hired former Character.AI chief Karandeep Anand as its first chief technology officer. Disney did not respond to Ars’ request for comment on whether the company plans to use Character.AI technology in products for kids.

Disney’s potential acquisition of Character.AI technology could be part of an effort to get more involved in the AI game and profit from its boom, following the potentially lucrative partnership with OpenAI that fell through after Sora’s abrupt shutdown. The entertainment giant may be moving early in the hopes of acquiring chatbot technology proven to resonate with its fanbase.

However, the move could also raise ethical questions, given the previous controversies surrounding Character.AI. It remains to be seen whether Disney will be outbid and not acquire any Character.AI intellectual property, or if it will take over the platform in a transition managed by Character.AI employees.