Walt Disney is investing $1 billion in OpenAI and will allow the startup to use characters from the Star Wars, Pixar, and Marvel franchises in its Sora AI video generator. This deal could reshape how Hollywood creates content.
The three-year partnership announced on Thursday marks a pivotal step in Hollywood’s embrace of generative artificial intelligence, while addressing the industry’s concerns about AI’s impact on creative jobs and intellectual property rights.
As part of the licensing deal, Sora and ChatGPT Images will begin generating videos using licensed Disney characters such as Mickey Mouse, Cinderella, and Mufasa, starting early next year. The agreement excludes any talent likenesses or voices.
“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.
Hollywood’s unions, which are monitoring the expanding use of generative AI, reacted cautiously to the deal.
Iger and OpenAI’s Sam Altman began discussions years ago about showcasing the potential of generative AI when combined with Disney’s characters and stories, according to a source familiar with the talks.
Before the launch, OpenAI provided the studio with early previews of its image-generation tool Sora, according to the source who requested anonymity to discuss the negotiations. Disney found OpenAI willing to engage constructively in this dialogue.
Iger previewed part of the strategy during an investor call in November, mentioning that AI would enable the company to provide Disney+ users with tools to create and consume user-generated content, primarily in short form.
As part of the agreement with OpenAI, a selection of user-generated videos will be available for streaming on Disney+, allowing the platform to capitalize on the growing appeal for short-form video content.
The media conglomerate will also receive warrants to purchase additional equity in the ChatGPT maker.
The companies will use OpenAI’s models to develop new products and customer experiences, including for Disney+ subscribers, while Disney will deploy ChatGPT for its employees.
The deal includes safeguards to prevent characters from being depicted in inappropriate situations. Disney also plans to use OpenAI’s tools internally to support film production for efficiency gains, according to the source.
The partnership comes months after Creative Artists Agency, Hollywood’s premier talent agency, criticized OpenAI for exposing artists to “significant risk” through Sora and questioned if creative professionals would be compensated for their work.
Danny Lin, president of the Animation Guild, expressed concerns about compensation for artists, which the union plans to address.
While animators do not own the rights to Disney characters, “we’re certainly the reason they exist and the reason they have such earning potential,” Lin said.
The Writers Guild of America stated it would meet with Disney to determine how much of its members’ labor would be used in user-generated videos.
“Disney’s announcement with OpenAI appears to sanction its theft of our work and cedes the value of what we create to a tech company that has built its business off our backs,” WGA leaders said in a note to members.
SAG-AFTRA, representing actors and other entertainment workers, said Disney and OpenAI contacted the union to offer assurances that the deal would ensure the ethical and responsible use of the technology. “The ongoing dialogue reflects a significant commitment to taking SAG-AFTRA members’ concerns into account in the protective measures applied to image, likeness, voice, performance, and intellectual property rights generally,” the union stated.
Emarketer analyst Ross Benes noted that unions’ power is limited and “they will unlikely be able to stem the momentum of AI-produced media.” CNBC reported that Disney sent a cease and desist letter to Google, alleging copyright infringement. Disney and Comcast’s Universal filed a copyright lawsuit against AI photo generation firm Midjourney for using the studios’ best-known characters.
