Character.AI, the chatbot development platform, has initiated Chapter 11 bankruptcy proceedings in the U.S. to facilitate a court-supervised asset sale. Disney has emerged as the initial bidder, offering $20 million for a perpetual non-exclusive license for certain intellectual property and specific claims of the company. The service plans to continue operations during the bankruptcy process, which is expected to conclude by late November or early December. If no buyer is found willing to maintain the platform, it may face closure.