Character.ai had about 12 million monthly active users, roughly $2.5m a month in advertising sales and $57m in unrestricted cash when it filed for Chapter 11 in Delaware on October 12. What it no longer had was most of its staff. Of about 86 full-time employees at the end of September, 66 had accepted jobs at Disney. Eighteen were still active on the day of the petition, and eight were expected to stay. The company that taught a generation of teenagers to talk to fictional characters is being sold in pieces, and the most valuable piece walked out of the door before the court was asked to approve anything.
Luis Rijo
PPC Land's account of the petition, case number 26-11603 in the US Bankruptcy Court for the District of Delaware, sets out the deal. Disney Worldwide Services is the stalking horse bidder, paying $20m plus transition services for a non-exclusive perpetual licence to certain intellectual property and claims. It is not buying the platform. "The platform will be wound down," the company said. Its chief executive, Colin M. Adams, who is also a senior managing director at the restructuring firm Areté Partners, called the process the "best opportunity to maximize value for all stakeholders." Karandeep Anand, the former Character.ai chief executive, is now Disney's chief technology officer.
The money that matters most does not go to the company at all. The bidding procedures motion filed on October 13 shows that Disney offered about 65 employees roughly $60m in annual run-rate compensation plus a $30m retention pool, and estimates the total over the first three years at about $180m. The licence covers code for training, safety and serving systems and nine patents. It excludes the app, the brand, the domains, user data and chats, training data and finished models. Rival bids must reach at least $21.7m, covering the $20m price, a $700,000 break-up fee and $1m more. Bids are due on November 20, an auction is set for November 23 and a sale hearing for November 24. Disney may walk if a bidding procedures order is not entered by November 2.
The wages motion explains how the staff came to leave. Of the 66 who accepted Disney's offers, 56 have resigned and ten on H-1B, TN or F-1 visas are expected to. The last payroll, on September 30, was about $995,000. The cash management motion lists $59.4m in total, including about $38.6m at Morgan Stanley and $13.6m in a Silicon Valley Bank sweep account. Two directors receive $87,500 a quarter each, and a "Special Director" receives $60,000 a month. The motion is frank about the outcome: "the Debtor is likely to winddown its operations following a sale."
Disney's terms were not the first offer the company sought. A declaration from its banker, Adam Dunayer, says an earlier adviser engaged in August 2025 approached about 28 potential parties and drew "only one proposal that was ultimately not deemed to be actionable." The reason given is blunt: "the litigation and regulatory overhang on Character was too great." Disney's agreements were signed on September 18, 2026, and Disney required that the transaction go through Chapter 11.
That overhang is visible in the first-day declaration. Character.ai was losing about $8.2m a month in August even though advertising had grown from about $0.5m in July 2025 to about $2.5m in August 2026 and subscriptions had reached $2.8m a month. Compute cost about $56.1m between January and August 2026, about 45% of operating expenses. A group of 46 states and territories is negotiating a consent order; Kentucky sued in January, Pennsylvania in May; the FTC issued orders in September 2025; Italy's Garante imposed a €79,000 fine; and the UK Information Commissioner opened a new probe on September 25. Adams described the business as a "melting ice cube."
Users are the awkward part. The company's notice motion argues that its 163 million current and past users are not creditors, and that emailing them all "would be cost-prohibitive," so notice will go by blog post, website and app instead. Another motion asks to pay unnamed critical vendors up to $2.5m, warning that without them the company "risks losing all of the data, code, intellectual property." Google is the largest named unsecured creditor at $4,148,944.
The lawyers are preparing for disputes that have not yet happened. Disney's notice of appearance, signed by Skadden, reserves its right to a jury trial, an Article III judge and setoff, and states that it "does not consent to the entry of final orders or judgments by the Court." And before the first hearing, set for 1:30pm Eastern on October 14 before Judge Brendan L. Shannon, the insurance motion shows that Character.ai pays $4,527,125 a year for 12 directors and officers policies, about 88% of its $5.2m insurance programme. All run from January 15, 2026 to January 15, 2028.
What Disney is buying, then, is people and code, not the audience. The 12 million monthly users, their chats and the brand stay behind in an estate preparing to close. That distinction, between the assets a company can sell and the relationships it cannot, ran through much of the rest of the day.
The price of the newest models
Google set a price for its newest model and a fence around it. Koray Kavukcuoglu, chief AI architect, announced Gemini 4 Argon at $2 per million input tokens and $10 per million output tokens, described as an "introductory price," with a 95% discount on cached input and a one-million-token limit through the Gemini API. Consumers need an AI Pro or Ultra subscription; free users cannot use it. Google did not say how long the introductory price lasts. "Gemini 4 Argon is just the beginning," Kavukcuoglu said.
Argon arrived in Search the same day. Barry Schwartz reported for Search Engine Roundtable that Nick Fox and Robby Stein announced it as "now rolling out globally in Search" through AI Mode for Pro and Ultra subscribers, and that AI Mode responses now include links. In the Gemini app, the same subscribers get a tasks mode that keeps working in the background, connections to "more than 40 apps" including Instacart, OpenTable, Adobe and Shopify, and Antigravity in the macOS app. The subscriptions start at $19.99 a month. Usage limits for Argon, country availability and data retention were not disclosed.
Salesforce made the case for not choosing a single model at all. In a newsroom interview, Michael Andrew, chief data officer, said customers should pick frontier, open or Salesforce's own model for each task, and described Koa, its CRM reasoning model built with NVIDIA, as trained in simulations drawn from 27 years of CRM workflows. "Different models have different strengths and weaknesses, and they're changing all the time," he said. Parameters, benchmarks, pricing and availability were not disclosed.
NVIDIA, meanwhile, collected French customers' claims. Its blog said Mirakl had cut seller catalogue onboarding to under two hours after onboarding more than 70 million products with open and fine-tuned models. No baseline, period or model names were given, and every figure in the post came from the companies themselves. Clueso, a San Francisco start-up whose agents operate real software, record it and edit the result into product videos, raised a $10m Series A led by Dharana Capital, with existing investors putting in more than 80%. It claims more than 1,000 customers and revenue "approaching eight figures."
Feeds that listen, glasses that record
Meta is asking Facebook users to say what they want. A new space in the three-dot menu lets users add topics for Feed and Reels, and written follow-up questions now attach to the "Interested" and "Not interested" buttons. Large language models in ranking take that typed text alongside "thousands of other signals," and recommendations adapt within the same session. Meta's post has no figures on users, tests or markets, and does not say whether the typed text is used for advertising or model training.
The same company reported a different kind of removal. Meta said it took down more than 3.7 million accounts, Pages and Groups in a joint operation run from the National Crime Agency's London headquarters from October 6, targeting scam networks in Nigeria, Ghana and neighbouring countries. Police followed leads on more than 30 scam centres, made 28 arrests and rescued 117 trafficking victims in Ghana. "Fraudsters can operate from anywhere and will target victims both domestically and globally," said Nick Sharp of the NCA. Meta called it "the largest operation of its kind to date."
Meta is also restricting who can advertise on its platforms. Adweek's Mark Stenberg, Trishla Ostwal and Kendra Barnett reported on October 13 that Meta no longer runs ads from TikTok, or ads from third parties that link to TikTok and other ByteDance properties, in the US, Canada, Egypt, Indonesia, Japan, Thailand and Vietnam, enforced from October 8. Buyers told Adweek that "blocking a rival makes sense," but that stopping brands from linking to TikTok is another matter, particularly for creator campaigns.
Glasses with cameras raise the bystander's question. The European Data Protection Board adopted a preliminary statement on October 13 saying that device makers and AI providers "should not rely on the users' actions to meet their own GDPR obligations." The household exemption must be "narrowly construed," consent after recording is invalid, and legitimate interest is "particularly difficult to demonstrate" for AI training. The board proposed indicator lights that cannot work when covered, shutter sounds and persistent storage disabled by default. It named no company and set no deadline. Peter Craddock of Osborne Clarke asked whether such statements had become "an avenue for the EDPB to avoid stakeholder dialogue."
The next pair is coming regardless. SammyGuru reported that Samsung's smart glasses weigh about 41 grams with standard lenses, down from about 50 grams in April renders, with a 12-megapixel camera, four microphones, up to nine hours of battery and sales expected from November. Samsung has confirmed none of it, and no recording indicator is listed.
Apple charges more for the living room
Apple set new prices for its home devices. The Apple TV 4K more than doubles in price to $299, against $129 for the Wi-Fi model in 2022, with an A19 chip and Siri AI shipping as a beta in English in eight countries, none in the EU. It reaches stores on November 13. Server-side features carry daily limits, and Apple said expanded access will cost a fee "in the future." "Siri AI will not be initially available in the EU in iOS or iPadOS," the release's footnote said. The HomePod mini 2 costs $149, up from $99, and ships on October 30 without Siri AI, which follows later as a free update with no date. Apple also announced nine LG and Schneider Electric smart home devices that set up without a manufacturer app or account, priced from $39.95 to $399.95, with camera video stored in iCloud+ for ten days and end-to-end encrypted. Shipping starts in December, and nothing is offered in the EU.
Who gets cited, and who gets counted
The search engines are building reports on the new currency of AI visibility. Bing launched a Topics Portfolio beta in Bing Webmaster Tools that groups grounding queries into topics and lists "opportunity queries" where other sites are cited and the user's site is not, with volumes shown as ranges. "Treat the numbers as directional signals for planning, not as a precise ledger," Microsoft advised. Schwartz covered the same launch for Search Engine Roundtable, noting that there is no click data yet.
Semrush's first AI Visibility Index with UK data found that Asda ranks 606th in ChatGPT citations while Tesco sits 25th, even though Asda ranked eighth for mentions and Tesco ninth. News makes up 29.5% of ChatGPT's UK citation weight against 19.6% in the US. "This edition tests recurrence, not growth," the report says. At Semrush's Spotlight event in London on October 13, Trishla Ostwal reported for Adweek, Motorway and Flo Health described how they try to get cited. "We can publish new content and see it being cited within 24 hours," said Cassie Hall of Motorway. Flo has a manager dedicated to LLM discoverability.
Ikea's chief marketing officer treats language models as one more place where a brand must stay consistent. Seb Joseph interviewed Vincenzo Riili for Digiday, who argued that models draw on everything written about a company, from its sites to its financial filings. "It's not only about communication anymore, it's also about other elements that go and get fed into the algorithm," he said. He called AI "a companion," not yet ready to automate creative work.
The data underneath search is contested. SerpApi, which Google is suing in the Northern District of California, launched an Extract API that scrapes any public page and crawls up to 100 pages per request, at one credit per page. It does not run JavaScript, and SerpApi did not say whether it obeys robots.txt. Google's own Search Console had trouble of a different kind: its performance report date picker was stuck at 1969 on the morning of October 13 before a fix arrived by 9:10am, Schwartz reported. A Reddit user described Google showing an old domain again about four months after a migration, with impressions on the new domain falling from about 5,000 a day to 20 a week. "Sometimes things just take a particularly long time to be fully processed," John Mueller replied.
Google also explained how it handles PDFs. Schwartz summarised a Search Off the Record episode in which Martin Splitt and John Mueller described converting PDFs to HTML for indexing, following text links inside them and recrawling them far less often than HTML pages, so an updated file may be better served at a new URL. Restaurants on Google Business Profiles can now tag dishes as gluten-free, dairy-free, halal and kosher, Lisa Landsman of Google announced. Merchant Center product videos, meanwhile, are stuck in "preview processing", showing as static images, with no fix date.
Ad formats in flux
The ads beneath AI answers are still being designed. PPC News Feed reported that Google is testing two layouts for sponsored results in AI Mode, one on a white background with a thin grey border and one with no border that looks "more like traditional search results," and testing whether mobile AI Mode ads show a website name or a URL. Merchant Center added a store_address attribute now required for local inventory ads and local free listings. Bing darkened sitelink borders and turned its blue call-to-action button white. And Microsoft's Ads API added bulk management of conversion value rules and tone options for AI text, including "Friendly, Persuasive, Cute, and Inspiring," plus a setting that opts campaigns out of product ads.
Google's monthly Demand Gen update contained no new formats, only a claim about data. Advertisers building "data strength" with Google tag gateway see "on average, over 20% conversion uplift in Demand Gen campaigns," Google said, based on internal analysis whose footnote is not visible. The insurer The Zebra reported a 16% increase in conversion volume, with no time window or baseline. Recovered conversions are a measurement effect, not necessarily new sales.
Attention, measured and mismeasured
Measurement claims from retailers and researchers came with familiar gaps. Circana's study for Best Buy Ads found nearly 16% of media-driven sales landed at competing retailers and a return on ad spend 79% higher than all other media, measured on Best Buy's US sales only. The number of brands, the period and who paid for the study were not disclosed. "For years, retail media measurement has focused primarily on what happens inside a retailer's own walls," said Lisa Valentino, president of Best Buy Ads.
Lumen Research, with Amazon Ads and Cint, found that across 270 campaigns purchase intent needs a median 47 seconds of cumulative attention. Peter Buckley of Meta summarised it: "Cumulative attention is just frequency counted properly: every exposure, weighted by whether anyone looked." Markets, dates and the spread around the median were not given.
Connected TV is where measurement claims draw the sharpest pushback. David Nyurenberg of InterMedia Advertising wrote an open letter in AdExchanger to companies selling "performance CTV", arguing that television works through lag and halo effects that last-touch models credit to search. On one campaign, "the pixel recorded 109 completed checkouts" while a CRM match found 1,250. "Please stop calling everything performance CTV," he wrote. Alyssa Boyle profiled Starling for AdExchanger, a start-up launched last month with about 20 employees that takes show-level signals from publishers including AMC, TelevisaUnivision and Paramount and builds custom segments sold through private marketplace deals. Pairing show titles with audience identifiers is the "holy grail" for buyers, said Michael Bassik, its founder, though many publishers read the 1988 Video Privacy Protection Act as barring exactly that. Starling claims compliance through clean rooms and modelling and declined to name its partners.
Creator commerce has its own arithmetic. Tim Peterson's Future of TV Briefing for Digiday drew on a Flywheel report covering 1.5 million TikTok Shop product samples: creators make a video only 47% of the time, only 14% generate sales, and a creator who posts a single video drives $7.19 in sales on average against $74.07 per video for those posting 20 or more. Deren Baker of Flywheel said a lot of brands get "really freaked out" on learning that success can require 5,000 videos live a month.
Subscribers, viewers and the people who leave
Audiences that pay are worth more than audiences that pass through. CNN is taking its All Access subscription to the UK and Canada, at £4.99 a month or £49.99 a year in Britain, a week after the Skydance merger closed, Jessica Davies reported for Digiday. "Ultimately, we're trying to build a direct-to-consumer business," said Amanda Rottier, head of growth. INMA's Greg Piechota found that at five publishers about 1% of super users generated between 60% and 81% of total revenue. "Those heavy users are now the business," he said.
Cable news audiences continue to shrink. In Nielsen figures for the week of September 28, MS NOW was the only network to gain in a measured demographic, with total day viewers aged 25 to 54 up 13%, while Fox News primetime was down 33% in total viewers year on year, Mark Mwachiro reported. Some of the people who once made that television are now building their own businesses. Mwachiro also profiled Terry Moran, Jen Ashton and Vinita Nair, former network journalists running newsletters and memberships; Ashton's Ajenda generated seven figures in its first year and doubled revenue in its second. "It's the best and hardest job I've ever had," Moran said.
YouTube's charts show how quickly attention moves. Taylor Swift's "Patient Zero" lost 45% of its global YouTube views in its second week, falling from 24,777,513 to 13,680,832, and dropped from first to fourth in the US, where Ella Langley's "Choosin' Texas" returned to No. 1 in its 49th week on the chart.
Brands sell the work, OpenAI sells in person
OpenAI is selling ChatGPT to businesses the old-fashioned way. At Semrush Spotlight, Leila Woodington, head of B2B marketing for EMEA, named field marketing as OpenAI's strongest channel, Ostwal reported. "Field is the one I would definitely put out as our strongest channel right now," she said. Marketers in Adweek's Marketing Vanguard community, at a session titled "Show Us the Prompt," shared an agent that cut a two-week versioning process to two minutes and a sales tool that reduced 15 hours of weekly content hunting to under three minutes.
The day's campaigns leaned on the physical. Chipotle released a three-foot-wide, 170-litre "Big A** Bag" to promote Family Meals at $10 a person, Hannah Bowler reported. "It's fun, it's ridiculous," said Fernando Machado, chief brand officer. Pringles offered one fan a branded urn and a 200-year supply of crisps in a Halloween campaign starring a real funeral director, with entries closing on October 22. Aura, the digital picture frame company founded by two former Twitter executives, launched its largest campaign to recast the frame as a private social network, Brittaney Kiefer reported in Adweek. And the Chicago Bulls' new warm-up jackets drew criticism for a Plus500 sponsor logo much larger than the team's own, Bill Bradley reported, a week before the NBA season begins on October 20.
The advocates count their own resources
The privacy group whose complaints helped produce last week's Norwegian fine on Xandr published its own accounts. noyb's 2025 annual report shows 21 GDPR complaints filed in 2025, down from more than 40 in 2023, as its campaign against the Digital Omnibus absorbed resources. Income was €1,558,856 and 460 cases were pending at the end of the year. Max Schrems warned of "increasing political pressure on DPAs to interpret the GDPR in an (even more) business friendly way."
What the day added up to
Character.ai's filings make explicit what is usually left implicit. A company's value can sit in a few dozen engineers, nine patents and a codebase, while 12 million monthly users and their conversations are treated as something to be wound down, notified by blog post and excluded from the sale. Disney is paying about nine times as much for the people as for the company.
The rest of the day's news turned on the same question of what is being bought. Google is selling access to its newest model by subscription tier and token. Apple is charging more for devices whose most advertised feature arrives later, in eight countries and not in the EU. Meta wants users to tell its ranking system what they want in words, and regulators want makers of camera glasses to answer for what the wearer records. Buyers are paying for attention by the second and for citations by the query. In each case the asset that matters is the relationship with a person who did not sign the contract, and it is not always clear who answers for it when the business is sold.
By the numbers
$180m
Disney's estimate of three-year pay and retention for the Character.ai staff it hired, against $20m for the company.
Disney budgets $180m for Character.ai staff, $20m for the bankrupt company
163 million
Current and past Character.ai users the company says are not creditors and will be told by blog post.
Character.ai says its 163 million users are not bankruptcy creditors
$2 per million tokens
Introductory input price for Gemini 4 Argon, which free Gemini users cannot access.
Google prices Gemini 4 Argon at $2 per million tokens, paid users only
47 seconds
Median cumulative attention Lumen found was needed to move purchase intent across 270 campaigns.
Purchase intent needs a median 47 seconds of ad attention, Lumen finds
November 20
Deadline for rival bids for the Character.ai assets, ahead of a November 23 auction.
Disney budgets $180m for Character.ai staff, $20m for the bankrupt company
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