Disney has reached an agreement to employ most of the staff from the recently bankrupted chatbot startup Character.AI. This move follows Character.AI’s bankruptcy filing earlier this week. Disney’s interest in the team is tied to its acquisition of select assets from Character.AI for $20 million. The former CEO of Character.AI, Karandeep Anand, became Disney’s first Chief Technology Officer in September, signaling Disney’s strategic intent to integrate AI expertise.

According to a legal filing revealed by Bloomberg, Disney has committed to extending job offers to at least 60 employees from Character.AI. These positions come with an estimated combined annual compensation of $60 million. The filing notes that the vast majority of those employees who received offers from Disney have accepted them, showcasing Disney’s appeal as a new workplace for the displaced staff.

However, it’s important to note that this arrangement is a stalking horse bid, meaning that Disney’s offer is a baseline and could be superseded by a higher bid from another company interested in acquiring Character.AI’s assets or workforce. Disney’s willingness to absorb so many employees highlights the competitive value of Character.AI’s team despite the startup’s financial and legal challenges.

Character.AI faced significant hurdles, including soaring costs and multiple potential litigation and regulatory issues related to child safety concerns and a tragic lawsuit involving the platform. These difficulties contributed to its bankruptcy despite having a large and dedicated user base. Disney’s move to hire much of the workforce represents a strategic effort to capitalize on Character.AI’s talent and technology within the broader media and entertainment industry.