The 2023 Hollywood writers' and actors' strike, which shut down the industry for more than four months, was partly about finding a way to protect it from the coming artificial intelligence revolution. The deal the writers and the Screen Actors Guild (SAG) made with the studios included prohibiting exploitation of writers' material to train AI models, create digital recreations, or use AI to reduce writers' work or their pay.
Hollywood studios were caught between wanting to exploit the new technology and the fear that it would eventually make film studios irrelevant.
Disney decided to adopt a policy of "if ya can't beat 'em, join 'em." Disney will invest $1 billion in OpenAI over the next three years and license their characters and characters from the Star Wars and Marvel universes for use on ChatGPT's short-form AI video platform Sora. Users will be able to create short videos and post them to social media.
Diseny will be compensated by OpenAI for the use of the characters and will also be able to "buy more stock in OpenAI at its current $500 billion valuation," according to the Wall Street Journal."
Disney is taking a huge gamble. It's dead certain that Disney is not going to approve of some of the videos made with Disney characters. "The agreement includes provisions limiting what the Disney characters can do in Sora-created videos related to drugs and alcohol, sex, and interactions with other companies’ properties," the Journal reports. Disney must have a great deal of trust that OpenAI will be able to police the deal and limit the problematic content.
On the same day the deal with OpenAI was announced, Disney sued Google "for allegedly using copyright material to train its AI systems and allowing its tools to output material that violates copyrights," according to the Journal. The letter of intent to sue included dozens of images from Google’s Gemini, Nano Banana and Veo apps "featuring Disney-owned characters like Darth Vader, Homer Simpson and Spider-Man," according to the WSJ.
The talks included dozens of meetings, including with Disney Chief Executive Bob Iger and OpenAI CEO Sam Altman, the knowledgeable person said.
“In this deal, OpenAI is both respecting and valuing our creativity,” Iger said Thursday on CNBC’s “Squawk on the Street” show, adding that Disney had been in conversations with Google over respecting copyrights that didn’t bear fruit. “We felt we had no choice but to send them a cease and desist.”
The ability to engage with characters in 30-second videos is of particular interest to Disney because AI can help the company win and retain younger audiences, Iger said. He expects Sora generated content to be spotlighted on Disney+, which should boost younger users on that platform.
While the deal is for three years, the partnership is exclusive for only one year, after which Disney can make deals with other AI companies. The incredible speed of the AI revolution will make some of the agreements obsolete very quickly.
Disney's Google suit is a shot across the bow, putting other AI companies on notice that Disney is watching closely. OpenAI has been in a race with Google to put out improved versions of its AI models.
OpenAI has been on high alert from the rising threat of Google after it released a new version of its Gemini AI model last month that surpassed OpenAI’s models on industry benchmark tests. Altman declared a “code red” effort to improve the quality of ChatGPT and to delay other products.
Thursday afternoon OpenAI released its GPT-5.2 model, which it said surpassed Google’s latest model on key benchmarks. The update speeds up professional knowledge work for dozens of tasks, including perceiving images, creating spreadsheets, writing code and handling complex, multistep projects, the company said.
We can expect other film studios to make similar deals with other AI companies as the revolution in production efficiency, cost reduction, and content generation continues to accelerate.
