Disney sends cease and desist letter to Character.AI (www.engadget.com)

Disney has sent a cease-and-desist to Character.AI, accusing the chatbot company of hosting bots that imitate Disney-owned characters — including those from Pixar, Star Wars and the Marvel Cinematic Universe — and demanding removal. The letter alleges not only copyright infringement but also that some of these character bots have been “sexually exploitive and otherwise harmful and dangerous to children,” and warns of reputational damage. Character.AI says it responds to rights‑holder requests and has removed the reported characters. The move follows broader scrutiny of Character.AI’s safety practices (the platform has been tied to two teen suicides after conversations with bots) and ongoing probes by the FTC and state attorneys general. For the AI/ML community this raises sharpened legal and engineering stakes: conversational models that emulate copyrighted personas now face active enforcement, not just ethical objections. Key implications include increased pressure to implement robust IP detection, persona‑filtering and age‑safety guardrails, clearer provenance and licensing for training data and prepackaged personas, and rethinking “persona engineering” techniques that mimic real characters. Disney’s recent litigation against other AI firms (e.g., Midjourney) signals a trend toward aggressive rights‑holder enforcement that could reshape model design, content-moderation pipelines, and commercial licensing strategies for generative AI products.