Disney accuses Character.AI of copyright infringement and child safety failures
Disney sent a cease-and-desist letter to Character.AI in September 2025, alleging the chatbot platform trained its AI on Disney's copyrighted works and created unauthorized interactive chatbots representing Disney, Pixar, Star Wars, and Marvel characters. Disney claimed some chatbots exhibited harmful behaviours toward children, including sexual exploitation and emotional manipulation.
What happened
Disney sent a cease-and-desist letter to Character.AI, alleging that the startup trained its AI on Disney's copyrighted works and created interactive chatbots representing characters from Disney, Pixar, Star Wars, and Marvel franchises without authorisation.
The letter claimed these chatbots misled consumers, especially children, into believing Disney endorses them, and that some exhibited harmful behaviours including sexual exploitation and emotional manipulation of children.
Character.AI responded by removing the infringing characters, stating: "It's always up to rightsholders to decide how people may interact with their IP, and we respond swiftly to requests to remove content that rightsholders report to us."
Reported impact
Disney alleged that Character.AI's conduct damaged its brand and reputation through the creation of chatbots involving sexual exploitation and emotional manipulation of children.
Character.AI has faced prior legal and government scrutiny over safety concerns, including involvement in cases where teenagers discussed suicide with its chatbots and subsequently took their own lives.
Index analysis
The incident raises issues around intellectual property protection, unethical governance, content control and brand safety for media companies in relation to AI systems trained on copyrighted content.
The case signals an accelerating legal and ethical conflict between AI companies leveraging copyrighted content for training or deployment and traditional media owners insisting on preservation of their rights and reputations.
Governance controls
Character.AI's apparent lack of licensing agreements or permission processes for using copyrighted characters indicates inadequate governance and oversight mechanisms prior to deployment of character-based chatbots.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.