Disney is making a costly move to bring artificial-intelligence talent in-house from a startup that has collapsed under legal pressure. The entertainment giant has agreed to pay $60 million a year to 66 employees from Character.AI, a chatbot company that filed for Chapter 11 bankruptcy, the U.S. court process for reorganizing or selling a business. The arrangement was disclosed in a filing Tuesday by Character.AI’s parent company. The deal came two weeks after Disney laid off several hundred workers, including some in technology roles. It also follows Disney’s mid-September hiring of Character.AI CEO Karandeep Anand as its first company-wide technology chief.

The hiring is part of an AI strategy under Disney CEO Josh D'Amaro. D'Amaro has been investing in Disney’s technology platforms to try to revive a stock that has gained less than 2% in the past 12 months and has fallen more than 36% over the past five years. The late-September layoffs were Disney’s third major round of job cuts since D'Amaro took over in mid-March. Disney has not disclosed how much it is paying Anand.

Character.AI’s path to bankruptcy was shaped by serious legal and regulatory problems. The company faced lawsuits from families who alleged that teenagers harmed themselves or committed suicide after using its custom AI chatbots. Earlier this year, Character.AI and Google, one of its backers, settled several child safety lawsuits. Last fall, Disney sent a cease-and-desist letter telling the startup not to create AI chatbots featuring its copyrighted characters without permission. Character.AI complied and removed chatbots built around Disney franchises such as Star Wars and Marvel.

In its bankruptcy announcement, Character.AI said it had been confronting "significant legal, regulatory, and operational headwinds." Now Disney is stepping in to acquire both people and intellectual property. Under the arrangement, Disney has agreed to pay $20 million for some of Character.AI’s key assets, including certain intellectual property and technology. Other companies can submit competing bids for those assets by November 20, and the process will be overseen by a bankruptcy court judge. Disney did not respond to requests for comment.

The $60 million annual compensation figure covers the 66 Character.AI employees who were offered jobs at Disney. Of that group, 56 have already resigned from the startup. The remaining 10 are waiting for the U.S. government to update their work visas. The filing also shows Disney is setting aside an additional $30 million for an aggregate retention pool. Over the next three years, Disney expects to spend about $180 million on total compensation and retention for these staffers.

Entertainment lawyer Corey Martin of Granderson Des Rochers, who advises companies on media transactions, said the size of the pay package is not surprising because Character.AI’s employees are its biggest asset.

"They're highly compensated employees. The numbers can be eye-popping, but it's not that unusual in this space," Martin said.

He did not work on the deal or with Disney.

Anand sent a memo to Disney employees last Friday in which he described the media business as being "at an inflection point." He said Disney was "uniquely positioned to win" in a competitive industry. Anand also praised his new colleagues directly: "What stands out most is the talent and care this team puts into its work, the craft Disney has perfected, and the strong foundation you've built."

For Disney, the move shows a clear bet on specialized AI talent even as the company trims its broader workforce. The next key date is November 20, when competing bids for Character.AI’s assets are due. If Disney’s bid prevails, the 66 new hires will be part of an effort to strengthen the company’s technology platforms and, its leadership hopes, improve a stock price that has badly lagged over the past five years.