Disney’s Buyout of Character AI Puts Profits Over Children
WASHINGTON, D.C. — Character AI has agreed to sell $20M in assets to Disney after filing for bankruptcy. As documented by Public Citizen research in 2023 and 2026, Character AI creates and markets manipulative chatbots that simulate emotional and romantic relationships with users, including children.
Character AI is facing serious allegations of harm to children. Several states are currently in the process of suing Character AI claiming chatbots “prey on children and led them into self harm.” Lawsuits have been filed by individuals as well, including by the mother of a 14 year old child who claims her son took his own life after forming a months-long intense romantic relationship with a Character AI chatbot. The child took his life moments after the chatbot said, “Please come home to me as soon as possible, my love.”
Rick Claypool, a researcher with Public Citizen, stated:
“Good riddance to Character.ai, an AI corporation built on reckless experimentation with young and vulnerable users, and which faced multiple lawsuits alleging culpability for teen suicides and other serious harms.
“AI ‘friends’ and ‘companions’ are high-risk, not “just entertainment,” as co-founder Noam Shazeer told Andreessen Horowitz, a major investor in the corporation that is also pouring millions toward influencing the 2026 midterms, in part to block common-sense AI regulations.
“Genuine human relationships can’t be automated. AI isn’t conscious. And behind the utopianism and catastrophizing, Big Tech cares only about one thing: The bottom line.”
Ilana Beller, director of state AI governance and tech policy, stated:
“It is deeply disturbing that Disney, a company known for classic animated children’s films, and children’s theme parks that it calls the “the happiest place on earth” is assuming assets from a platform that in the five years since its founding has been accused of leading children to commit violent harm to themselves or others, and whose product has been known to engage in sexually inappropriate conversations with children. This is a sad and scary example of a corporation choosing profit over the wellbeing of our children.
“At the same time, the federal government has failed to put any kind of meaningful guardrails on this dangerous and manipulative technology. Character AI is emblematic of the need to be able to hold companies liable for the harms their products cause to the public.”