Steamboat Chilly: Disney sends cease-and-desist to Character.AI over unauthorized chatbots

Disney has sent a cease-and-desist letter to Character.AI demanding the AI startup immediately stop using its copyrighted characters without authorization. The entertainment giant’s concern extends beyond financial damages to potential long-term brand harm, as the AI platform allows users to create chatbots that imitate Disney characters in ways the company cannot control.

What you should know: Disney’s legal action stems from a disturbing pattern of behavior identified on Character.AI’s platform involving its intellectual property.

• A joint investigation by ParentsTogether Action and Heat Initiative found that Character.AI’s chatbots engaged in “grooming and sexual exploitation, as well as emotional manipulation and addiction.”
• Disney’s letter specifically references this report as evidence that the platform “weaponizes” its characters in ways that could damage the brand long-term.
• Character.AI responded by removing the Disney-inspired characters, acknowledging that rightsholders should decide how people interact with their intellectual property.

How Character.AI works: The platform allows users to create AI-powered characters that respond to online chats designed to imitate real people or fictional characters.

• The service relies on large language model technology, similar to ChatGPT, which trains chatbots on massive volumes of text data.
• All characters on the platform are user-generated, though some are inspired by existing copyrighted characters from various media properties.

Disney’s broader AI copyright strategy: The entertainment company has taken an increasingly aggressive stance against AI companies for copyright infringement across multiple fronts.

• Disney sued China’s MiniMax in September alongside Comcast’s Universal and Warner Bros Discovery for unauthorized use of copyrighted material.
• The company previously filed a lawsuit against AI image generator Midjourney in June, along with Universal, for offering commercial services that create unauthorized AI-generated copies of their copyrighted work.

Why this matters: This case highlights the growing tension between AI companies and content creators over intellectual property rights, particularly when AI-generated content could potentially harm established brands through inappropriate or harmful interactions that the original creators never authorized or endorsed.