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Disney Strikes Billion-Dollar Deal With OpenAI
Generating Disney magic // Image by Kait Cunniff with DALL-E
Disney has struck a surprising and wide-ranging $1 billion deal with OpenAI that will bring its marquee IP to Sora in 2026 and weave ChatGPT into the company’s operations. It’s the first deal between a major Hollywood studio and a top AI firm.
The Generative Picture: By teaming with OpenAI, Disney is signaling that the AI revolution is here to stay… and Hollywood wants a cut. The company is still aggressively pursuing AI firms that use Disney IP without consent, but an embrace of companies that pay up will likely reshape entertainment and become a major revenue driver for participating studios… while also seriously straining relationships with the creative community.
Behind The Scenes: With Disney investing $1 billion in OpenAI, Sora has officially made it in Hollywood.
Under a three-year licensing agreement (for an undisclosed amount), Sora users can generate videos featuring 200 Disney animated characters and props, including Stitch, Ariel, and lightsabers. But they’ll be silent since voice rights aren’t included.
Star Wars characters like Han Solo and Marvel characters like Captain America are limited to animated or illustrated versions since the deal doesn’t include the ability to deepfake real actors (a legal nightmare!).
A collection of these user-generated Sora videos will stream on Disney+, which both companies hope will supercharge engagement on their platforms.
Disney will also become an enterprise OpenAI customer, “using its tech to build new products, tools, and experiences, including for Disney+, and deploying ChatGPT for its employees,” per Deadline.
The one thing Disney isn’t allowing is letting OpenAI train its machine-learning models on Disney IP.
Final Credits (?): Disney’s deal with OpenAI underscores how the company is trying to position itself for a more interactive entertainment ecosystem. It struck a $1.5 billion deal with Epic Games earlier this year to bring Disney characters to Fortnite. Both integrations open up some… new challenges.
But a deal with an AI company is an about-face from just a couple of months ago, when Sora’s brash opt-out launch put Hollywood on the defensive. A Disney deal sets the blueprint for other studios to strike similar agreements and profit from the AI revolution rather than watch their IP — already scraped by Silicon Valley — be used for free.
Next Prompt: Sora’s embrace by Disney is already raising existential alarms throughout the creative community, so expect artists receiving a cut of revenue to be at the top of the demand list during next year’s union contract negotiations.
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Today’s email was written by David Vendrell.
Edited by Nick Comney. Polled and Copy-edited by Kait Cunniff.
Published by Darline Salazar.