The Walt Disney Co. signage on the floor of the New York Stock Exchange (NYSE) in New York, US, on Wednesday, May 7, 2025.
Michael Nagle | Bloomberg | Getty Images
The Walt Disney Company sent a cease and desist letter to Character.AI last week, warning the artificial intelligence startup to stop using copyrighted characters without authorization, a Disney spokesperson confirmed to CNBC on Tuesday.
A spokesperson for Character.AI said it removed the characters mentioned in the letter, and that “it’s always up to rightsholders to decide how people may interact with their IP.”
The spokesperson acknowledged that while some characters on its platform are completely original creations, others are “inspired by existing characters that people love.”
“We want to partner with the industry and rightsholders to empower them to bring their characters to our platform,” the Character.AI spokesperson told CNBC. “Our goal is to give IP owners the tools to create controlled, engaging and revenue-generating experiences from deep fandom for their characters and stories, expanding their reach using our new, interactive format.”
The letter serves as the latest example of how media companies like Disney are working to protect their intellectual property during the AI boom.
Disney is already involved in an ongoing lawsuit against AI image creator Midjourney, alleging that the company improperly used and distributed AI-generated characters from movies like “Cars,” “Toy Story,” “Shrek,” “The Avengers” and others.
Axios first reported the cease and desist letter.
Character.AI allows users to create and interact with character-based chatbots. Google inked a $2.7 billion licensing deal with Character.AI and hired its founders in 2024, and the startup became embroiled in a wrongful death lawsuit that same year.
The family of Sewell Setzer III, a 14-year-old boy in Florida, alleged he committed suicide after he became addicted to talking with a number of AI chatbots on the app. One of the chatbots was named Daenerys Targaryen, or Dany, who is a character in the show “Game of Thrones,” according to the lawsuit.
Character.AI is not the only AI company that’s faced scrutiny over its approach to IP.
Earlier this month, a federal judge preliminarily approved Anthropic’s offer to pay $1.5 billion to settle a class action lawsuit with a group of authors, who claimed that the company had illegally downloaded their books and others from pirated databases.
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.
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