Disney just made one of the most consequential AI moves Hollywood has seen yet, and it comes with a billion-dollar price tag.
The company announced Thursday that it will invest $1 billion in OpenAI and give the startup access to some of the most valuable IP on the planet, including characters from Star Wars, Pixar, and Marvel.
In return, OpenAI’s Sora video generator and ChatGPT’s image tools will begin producing videos featuring licensed Disney characters as early as next year. Mickey Mouse, Cinderella, and Mufasa are all on the table, but human likenesses and voices are not included.
Disney framed the partnership as a careful expansion rather than a free-for-all. “Through this collaboration with OpenAI we will thoughtfully and responsibly extend the reach of our storytelling through generative AI, while respecting and protecting creators and their works,” Disney CEO Bob Iger said in the announcement.
Iger and OpenAI’s Sam Altman reportedly began discussing the idea years ago, looking for a way to demonstrate what generative AI could do when paired with a century’s worth of beloved characters.
Before Sora, the company’s powerful text-to-video generator, made its public debut, OpenAI gave Disney early access to the technology, and the source said Disney found the company “willing to engage constructively” about rights, safety, and creative concerns.
Such caution, given Hollywood’s past two years of debate over how AI should be used, who gets paid, and what protections performers deserve, was warranted, to say the least. Now, with this partnership underway, it’s a signal of how fast those debates are evolving.
User-generated Disney content is coming to Disney+
Back in November, Iger hinted that AI would let Disney+ subscribers create short-form content using Disney characters. Now it’s official: under the agreement, some of those user-generated videos will appear on Disney+, giving the streaming service a new foothold in the short-form world currently dominated by TikTok, Reels, and YouTube Shorts.
Disney will also deploy ChatGPT internally for employees and use OpenAI tools to support film production, as part of an effort to improve efficiency across its sprawling studio system.
For its part, Disney will receive warrants to buy more equity in OpenAI.
Strict guardrails and inevitable pushback
Naturally, the investment deal includes content restrictions to prevent characters from being depicted in inappropriate situations — a predictable safeguard when opening the vault of brands that fuel billions in revenue. Disney will also use OpenAI’s tools inside its own production pipeline, but with the same guardrails in place.
Still, not everyone would want to celebrate. Creative Artists Agency (CAA), one of Hollywood’s largest talent agencies, criticized Sora earlier this year for exposing artists to “significant risk,” reflecting how the broader tension between labor groups and AI companies hasn’t eased.
Legal battles continue in the background
The deal arrives amid rising copyright disputes. Disney reportedly sent a cease-and-desist to Google recently, alleging copyright infringement on a “massive scale” by scraping a vast trove of Disney’s protected works—including characters from Frozen, The Lion King, Star Wars, and Marvel hits like Deadpool and Spider-Man—to train its generative AI models, then enabling users to churn out unauthorized replicas via tools like Gemini.
The letter demands an immediate halt to such outputs (including on YouTube Shorts) and the rollout of safeguards to block future violations, after months of stalled talks.
This latest salvo builds on a rocky history between the two giants: Just last month, Disney and Google (YouTube TV’s parent) ended a bruising 15-day blackout of ESPN, ABC, and other channels over carriage fee hikes, with subscribers claiming $20 credits amid accusations of “bad-faith” talks from both sides. Now, with AI in the crosshairs, Disney’s cease-and-desist escalates the feud from streaming dollars to digital IP theft—proving old wounds die hard when billions are at stake
In a separate dispute that arose back in June, both Disney and Comcast’s NBCUniversal jointly sued Midjourney (a popular AI service that creates images from text prompts) for using their characters to train its image-generation models.
Although such legal disputes may not be going away anytime soon, this recent announcement shows Disney is no longer standing on the sidelines of generative AI. It seems like it’s stepping directly into the center of it. And with $1 billion behind the move, the rest of Hollywood will have to respond.
Sources: The Walt Disney Company, Reuters, Variety, CNBC