Disney spent the fall cutting jobs. Now it is paying top dollar for a small group of AI specialists. The company plans to pay $60 million a year to 66 employees from Character.AI, the AI chatbot startup that filed for bankruptcy this week, according to a Chapter 11 filing first reported by Business Insider. That works out to roughly $900,000 per person per year, and Disney is setting aside another $30 million for a retention pool to keep them, bringing its expected spending on the group to $180 million over three years.
The hiring comes about two weeks after Disney laid off a couple hundred employees, mostly in technology and human resources. It was the company’s third major round of cuts since Josh D’Amaro became CEO in March, following more than 1,000 layoffs in April and another round in July that reached Pixar and National Geographic. The contrast captures how AI is reshaping corporate payrolls: fewer jobs across the organization, and far more money for the handful of people who can build the technology.
Disney Is Buying a Team, Not a Company
Character.AI’s parent company, Character Technologies, filed for Chapter 11 bankruptcy on Oct. 12 in federal court in Delaware. Disney is not acquiring the company outright. It is the lead bidder, at $20 million, for a license to some of Character.AI’s intellectual property and technology, and rival bidders have until Nov. 20 to top that offer under the supervision of a bankruptcy judge.
The real prize is the people. Character.AI had about 86 full-time employees at the end of September, and 66 of them accepted jobs at Disney, according to court filings. Fifty-six have already resigned from the startup, while the other 10 are waiting on U.S. work-visa updates before they can start. In September, Disney had already hired Character.AI’s chief executive, Karandeep Anand, as its first company-wide chief technology officer.
Why the Price Tag Is So High
Pay packages like these have become common as technology and media companies compete for a small pool of AI engineers. Rather than buying startups outright, large companies increasingly hire away most of a startup’s staff and license its technology, a structure that avoids taking on the company’s liabilities. Google used a similar approach with Character.AI in 2024, when it struck a licensing deal valued at about $2.7 billion and rehired the startup’s founders.
For Disney, the bet is part of D’Amaro’s push to rebuild the company around technology. As we reported, Disney’s AI strategy has been showing up in its job postings long before it appeared in press releases. The company’s stock has been stagnant, and Hollywood is under pressure from consolidation, including the now-closed Warner Bros. deal.
A Startup Undone by Lawsuits
Character.AI built chatbots that let users talk with custom AI characters, and it reached tens of millions of users. It also became the target of lawsuits from families who said their teenagers harmed themselves or died by suicide after using the platform. The company settled its pending personal-injury lawsuits early this year and barred users under 18 from open-ended chats, but it said it continued to face high costs from litigation and regulatory investigations while losing $8 million to $9 million a month.
Disney’s relationship with the startup has also had friction. Last year, Disney sent Character.AI a cease-and-desist letter demanding that it stop letting users create chatbots based on characters from franchises like Star Wars and Marvel, and the startup removed them. A year later, Disney is hiring most of the people who built the platform, a sign of how quickly AI talent has become more valuable than the products it creates.
That tension is not unique to Disney. Across the media business, companies are cutting staff while growing, and as we’ve written, the layoff never really ends for the people who stay. For the workers Disney let go in September, a $900,000-a-year AI hire is a clear statement of where the company now sees its future.