Disney Takes Legal Action Against Character AI Over Copyright

The Walt Disney Company has escalated its efforts to protect its valuable intellectual property in the age of artificial intelligence. Last week, the media giant sent a cease and desist letter to the popular AI startup Character.AI, demanding a halt to the unauthorized use of its copyrighted characters on the chatbot platform, a Disney spokesperson confirmed.

The Walt Disney Co. signage on the floor of the New York Stock Exchange. Photo: Michael Nagle | Bloomberg | Getty Images

Character.AI Responds and Proposes Partnership

In response to Disney's legal warning, a spokesperson for Character.AI stated that the company had removed the specific characters mentioned in the letter. The spokesperson emphasized that "it's always up to rightsholders to decide how people may interact with their IP."

The company acknowledged that its platform features a mix of original AI creations and characters "inspired by existing characters that people love." Moving forward, Character.AI expressed a desire to work directly with intellectual property owners.

"We want to partner with the industry and rightsholders to empower them to bring their characters to our platform," the spokesperson said. They envision a future where IP owners can use their tools to create "controlled, engaging and revenue-generating experiences" that expand their brand's reach.

A Widening Battle Over AI and Intellectual Property

This incident is the latest flashpoint in the growing conflict between traditional media companies and the burgeoning AI industry. Disney is already a key player in an ongoing lawsuit against the AI image generator Midjourney. That suit alleges the AI company improperly used and distributed AI-generated versions of beloved characters from films like "Cars," "Toy Story," and "The Avengers."

AI Firms Face Mounting Legal Scrutiny

Character.AI, which allows users to create and interact with a vast library of chatbots, has faced other significant challenges. The company, whose founders were hired by Google in 2024 as part of a $2.7 billion licensing deal, was named in a wrongful death lawsuit that same year. The family of a 14-year-old boy alleged he became addicted to the app before committing suicide, noting that one of the chatbots he frequently interacted with was based on the "Game of Thrones" character Daenerys Targaryen.

This trend of legal action extends beyond just Disney and Character.AI. Earlier this month, a federal judge gave preliminary approval for AI company Anthropic to pay $1.5 billion to settle a class action lawsuit. The suit was brought by authors who claimed Anthropic had illegally used their books, sourced from pirated databases, to train its AI models.

If you are having suicidal thoughts or are in distress, contact the Suicide & Crisis Lifeline at 988 for support and assistance from a trained counselor.

News of the cease and desist letter was first reported by Axios.