Disney, the entertainment conglomerate that owns Marvel, Pixar, Lucasfilm and its own animated classics from 101 Dalmatians to Zootopia, licensed OpenAI to use its characters in generated videos.
What’s new: Disney and OpenAI signed a 3-year exclusive agreement that lets OpenAI train its Sora social video-gen app to produce 30-second clips that depict characters like Mickey Mouse, Cinderella, Black Panther, and Darth Vader. Open AI will compensate Disney for uses of its characters at an undisclosed rate, and Disney will stream a selection of user-generated videos on its Disney+ streaming network. In addition, Disney bought a $1 billion stake in OpenAI.
How it works: Starting in early 2026, users of the Sora app — not to be confused with the underlying Sora model — will be able to generate clips that show more than 200 fictional Disney characters. The deal is not yet final and remains subject to negotiation and board approval.
- The agreement does not cover character voices or real-world human actors, and depictions of sex, drugs, alcohol, and interactions with characters owned by other companies are off-limits, The New York Times reported.
- Disney will be a “major customer” of OpenAI for one year. During that time, it will provide ChatGPT to its employees and use OpenAI’s APIs to build tools and products for Disney+.
- Disney purchased $1 billion worth of OpenAI shares at a $500 billion valuation and received warrants to buy additional shares, The Wall Street Journal reported.
Behind the news: Disney is one of the world’s largest media companies by revenue and OpenAI is a clear leader in AI, which makes their alliance especially significant. It serves as a carrot in a carrot-and-stick strategy as Disney and other top entertainment companies are suing AI companies for alleged violations of intellectual property. Top music labels took a similar approach to gain a measure of control over AI startups that focus on music generation.
- Even as Disney invests in OpenAI, it is pursuing other AI companies over claims that they violated its copyrights by training models on its products without authorization. Disney recently sent cease-and-desist letters to Google and Character AI, demanding that they stop enabling AI models to generate likenesses of its characters without authorization, and earlier this year it sued image-generation startup Midjourney and Chinese AI startup MiniMax on similar grounds. Google responded by removing from YouTube AI-generated videos that include Disney characters.
- The world’s largest music labels, Sony Music Entertainment, Universal Music Group, and Warner Music Group, recently formed partnerships similar to the Disney-OpenAI deal with music-generation startups Klay, Udio, and Suno. The record labels agreed to license their recordings for use by AI systems and set up streaming services to allow music fans to generate variations on the licensed recordings. These arrangements settled lawsuits brought by the music labels against the AI startups on claims that the AI companies had infringed their copyrights by training models on their recordings without authorization. Some of the lawsuits remain in progress.
- The Disney-OpenAI alliance echoes a 2024 partnership between Runway, which competes with OpenAI in video generation, and Lionsgate, producer of blockbuster movie franchises like The Hunger Games. Runway fine-tuned its proprietary models on Lionsgate productions to enable the filmmaker to generate new imagery based on its previous work.
Why it matters: Video generation is a powerful creative tool, and one that Hollywood would like to have at its disposal. At the same time, generated videos are engaging increasingly larger audiences, raising the question whether it will draw attention and revenue away from Hollywood productions. Disney is embracing a future of custom, user-created media featuring its intellectual property as both a revenue stream in its own right and a hedge against a diminishing audience for theatrical releases and home video. Its investment in OpenAI also lets it share in AI’s upside. Cooperation between movie makers and AI companies gives both parties greater latitude to create compelling products and expand the audiences for both entertainment and AI-powered services.
We’re thinking: Filmmakers and videographers increasingly understand: AI and the arts may seem antithetical at first glance, but they’re a natural fit.