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AI NewsDisney agrees to hire the majority of Character.AI’s workforce

Disney agrees to hire the majority of Character.AI’s workforce

11:28 PM IST · October 18, 2026

Disney agrees to hire the majority of Character.AI’s workforce

After chatbot startup Character.AIfiled for bankruptcyearlier this week, many of its employees will have the opportunity to take jobs at Disney. Character.AI’s former CEO Karandeep Anand recentlybecame the entertainment giant’s first CTO, and the startup previously said that Disney had agreed to acquire some of its assets for $20 million. Alegal filingspotted byBloombergrevealed more details about the agreement between Character.AI and Disney, with Disney agreeing to make employment offers to at least 60 Character.AI employees — the majority of the workforce — paying them an estimated $60 million in annual compensation. The filing also says that the “vast majority” of Character.AI employees who were offered jobs at Disney accepted them. However, this is a stalking horse bid, so another company could come forward with a higher offer. The filing says that despite its “large and engaged user base,” Character.AI has been hobbled by high costs and “potential litigation-related liabilities and regulatory engagement.” (The company wassued by the mother of a 14-year-old boywho said her son became obsessed with one of Character.AI’s chatbots before committing suicide; it alsofaces government investigations over child safety concerns.)

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A federal judge denied a motion by xAI seeking to dismissan NAACP lawsuitaccusing the SpaceX-owned company of failing to obtain permits needed to operate the gas turbines powering its Colossus data center outside Memphis. Suing on behalf of the NAACP, the Southern Environmental Law Center said the AI company had “installed and operated at least 35 combustion turbines and other sources of air pollution at the Colossus site without ever obtaining the necessary preconstruction or operating air permits.” It also accused xAI of violating the Clean Air Act. xAI sought to have the lawsuit dismissed,claiming that the turbines are exemptfrom permitting requirements because they’re mobile. The company also argued that the plaintiffs did not have the standing to sue. “Because the plaintiffs have statutory standing under the Clean Air Act, because the combustion turbines are not ‘mobile sources’ under Mississippi’s [State Implementation Plan], and because the citizen suit provision does not violate Article II of the Constitution or the private nondelegation doctrine, the plaintiffs’ claims will proceed,” Judge Debra M. Brown wrote inher decision. Focusing on xAI’s claim that these kinds of citizen lawsuits are unconstitutional, Judge Brown wrote, “Because citizen suit plaintiffs sue on their own behalf, in their own name, and seek penalties that redress harm to themselves, they are not exercising the federal government’s executive power.” TechCrunch has reached out to SpaceX for comment. Ina statement, the NAACP’s director of environmental and climate justice Abre’ Connor described this as “another important victory in our effort to hold xAI accountable.” (A similar motion to dismiss from the Department of Justice wasdenied earlier this month) “The courts have repeatedly rejected attempts by xAI and the DOJ to dismiss the NAACP’s Clean Air Act case, affirming our right to pursue justice for communities impacted by pollution,” Connor said. “Our position has been clear: xAI cannot operate gas turbines without the required permits.” The NAACP lawsuit is moving forward as public opinion seems to have turned sharply against data centers, with New York recentlypassing a moratorium on new data centersand other state and local governments considering similar measures. The backlash also prompted Amazon and Microsoft topromise to stop using NDAsin their dealings with government agencies, and it could bea significant factor in the imminent U.S. midterm elections.

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