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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Nvidia shares reached a fresh record on Tuesday, climbing almost 3% and lifting the chipmaker’s market cap past $4.5 trillion.

The stock is now up about 39% for the year, and continues to attract investors as Nvidia steps up its pace of deal-making, cementing its position at the center of the artificial intelligence boom.

OpenAI said last week that Nvidia would take an equity stake worth up to $100 billion in the AI startup, and would build hundreds of billions of dollars worth of data centers filled with Nvidia graphics processing units. OpenAI then announced five massive new data centers with Oracle that are expected to be filled with hundreds of thousands of GPUs. The whole “Stargate” project will cost $500 billion, the companies said.

Nvidia CEO Jensen Huang says Nvidia’s products comprise about 70% of the spending on a new AI data center.

Analysts at Citi on Tuesday raised their price target on Nvidia from $200 to $210, citing an increased forecast for AI infrastructure spending after the OpenAI announcements.

“We believe OpenAI came to Nvidia asking for help as Nvidia has a very compelling product, and as the number of users and compute being consumed per user basis is growing,” Citi analyst Atif Malik wrote in the note.

OpenAI is far from alone, as Meta, Google and others are also dramatically ramping up their infrastructure spending.

CoreWeave, a cloud provider that includes Nvidia as a large shareholder, said Tuesday it had reached a deal to supply Meta with $14.2 billion in AI infrastructure services.

Nvidia’s stock is outperforming all of its megacap peers so far this year except for chipmaker Broadcom, which is up about 40%, similarly boosted by OpenAI.

WATCH: Worried about an AI bubble? Trader says she prefers hard assets, especially silver

Spotify CEO Daniel Ek will step down from his position and move to the role of executive chairman, the company said Tuesday.

Spotify shares dipped around 4% following the announcement.

Ek, who co-founded the streaming platform in 2006, will be replaced by current co-presidents and longtime executives Gustav Söderström and Alex Norström as co-CEOs, the company said in a release. The transition will happen Jan. 1, 2026.

“Over the last few years, I’ve turned over a large part of the day-to-day management and strategic direction of Spotify to Alex and Gustav–who have shaped the company from our earliest days and are now more than ready to guide our next phase,” Ek said in a release. “This change simply matches titles to how we already operate.”

Ek, who has been a member of the board since 2008, said his new role will focus on steering the company’s long-term strategy and providing support to its senior team.

“It’s been an honor of a lifetime for me to be able to lead Spotify for close to 20 years,” Ek said in an X post.