Disney found a way to buy Character.AI without buying its lawsuits. That is the tell for AI M&A: structure the deal to ring-fence litigation and incumbents can move on AI assets without taking the leg

What happened: Character.AI declared bankruptcy this week. Court filings indicate the bankruptcy was part of a deal letting Disney hire most of its staff, including former CEO Karandeep Anand, and potentially acquire most of its technology. Why it matters: The structure leaves whatever remains of Character.AI responsible for its legal battles, some still ongoing, letting Disney avoid the startup's liabilities and obligations. Key numbers: No specific figures provided.

Character.AI declared bankruptcy this week. Court filings indicate the bankruptcy was part of a deal letting Disney hire most of its staff, including former CEO Karandeep Anand, and potentially acquire most of its technology.

The structure leaves whatever remains of Character.AI responsible for its legal battles, some still ongoing, letting Disney avoid the startup's liabilities and obligations. Key numbers: No specific figures provided.