Disney on Thursday made a major AI bet, announcing a 3-year licensing deal with OpenAI that includes the media company making a $1 billion equity investment and licensing over 200 Disney characters to platform Sora for user-based GenAI short-form social videos.
Here are the main elements of the deal, which is still subject to negotiation of definitive agreements and required corporate and board approvals, outlined by Disney:
- Disney will make a $1 billion equity investment in OpenAI and receive warrants to purchase additional equity.
- Disney is becoming the first major content licensing partner on OpenAI’s short-form generative AI video platform Sora, which will be able to tap more than 200 animated, masked and creature characters from Disney, Marvel, Pixar and Star Wars – including costumes, props, vehicles and “iconic environments” – for user-prompted social videos that can be viewed and shared by fans.
- OpenAI’s ChatGPT Images will also be able to draw from the same Disney IP for consumers to create genAI images.
- The agreement does not include licensing of any talent likeness or voices.
- Under the licensing agreement fans will be able to watch curated selections of Sora-generated fan-inspired videos on the Disney+ streaming service.
- Sora and ChatGPT -generated videos created by fans using Disney’s characters are expected in early 20026.
- Alongside the licensing agreement, Disney is becoming a major customer of OpenAI, using its APIs to build new products and experiences, including for Disney+, and will deploy ChatGPT for its employees.
- Disney and OpenAI plan to collaborate using the AI company’s models to power new experiences for Disney+.
The deal marks a major endorsement in terms of Disney – with its position as a global media and entertainment giant – investing in OpenAI and allowing its genAI platforms to tap intellectual property for content. Particularly at a time when the advent and use of genAI is still developing and questions remain in terms of the future of content creation, the role of creatives in Hollywood and business models, which continue to evolve amid consumer and technological changes.
In the deal announcement, Disney and OpenAI stated they “are affirming a shared commitment to the responsible use of AI that protects user safety and the rights of creators. Together the companies will advance human-centered AI that respects the creative industries and expands what is possible for storytelling.”
Similarly, Disney CEO Robert Iger emphasized that the company will protect creators and their work but sees genAI as a way to let fans create their own types of content using OpenAI’s platforms and Disney IP to connect to the characters more closely.
“The rapid advancement of artificial intelligence marks an important moment for our industry, and 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,” Iger stated. “Bringing together Disney’s iconic stories and characters with OpenAI’s groundbreaking technology puts imagination and creativity directly into the hands of Disney fans in ways we’ve never seen before, giving them richer and more personal ways to connect with the Disney characters and stories they love.”
Iger reiterated this stance on protecting creators when he appeared on CNBC Thursday with OpenAI CEO Sam Altman to discuss the deal.
Asked about whether there are any risks in terms of those who have created iconic Disney IP being replaced, Iger again called out the fact that the deal doesn’t include voices or likeness, asserting that “this does not in any way represent a threat to the creators at all.”
“In fact, the opposite I think it honors them and respects them, in part because there’s a license fee associated with it,” he said.
In addition, Iger said it enables Disney to be comfortable in the sense that OpenAI will put “guardrails essentially around how these are used” so that there’s no concern around consumer or brand safety environments for the Disney IP.
Allowing users to create short-form social videos centered on Disney characters through Sora could also help Disney tap into younger audiences – a factor Iger mentioned during the CNBC interview.
He noted that videos created will be of the 30-second variety, so more like clips rather than shorts or movies, and where the company has seen the rise of consumption of short-form video and expansion of who can be considered a creator at large.
“This is a way for us as a company really to provide experiences to, particularly younger audiences, engaging with our characters in new ways,” Iger said.
As reported by Variety, the OpenAI deal comes after attorneys for Disney separately on Wednesday evening sent a cease-and-desist letter to Google, accusing the tech giant of copyright infringement by using AI models and services to “commercially exploit and distribute” infringing images and videos – including on Disney characters like those form Frozen, The Lion King, and Moana, among several others.
“Google is infringing Disney’s copyrights on a massive scale, by copying a large corpus of Disney’s copyrighted works without authorization to train and develop generative artificial intelligence (‘AI’) models and services, and by using AI models and services to commercially exploit and distribute copies of its protected works to consumers in violation of Disney’s copyrights,” stated the letter to Google’s general counsel, obtained and published by Variety.