Disney stock increased by 2.42%; Green Up Pointing Triangle is investing $1 billion in OpenAI and giving the AI firm permission to use Disney properties and characters to create brief, user-prompted social media videos. The company will allow users to make videos using more than 200 characters from Disney, Marvel, Star Wars, and Pixar using Sora, OpenAI’s short-form AI video platform, under a three-year licensing agreement. Disney+ will stream a carefully chosen collection of these user-generated shorts.
Until recently, Hollywood paid little attention to generative AI, preferring to concentrate on declining box office receipts and the continuous transition away from traditional television. However, the entertainment industry had to deal with a new threat after the writers’ and actors’ strikes in 2023 and OpenAI’s release of Sora: text-to-image and video models that were trained on copyrighted movies, TV series, and comic books. Disney and other studios had to choose between working with AI companies or suing them.
Disney to invest $1 billion into OpenAI
One day after Disney sent Google a cease-and-desist letter accusing the company of “infringing Disney’s copyrights on a massive scale,” Disney and OpenAI announced their collaboration. Disney demonstrated its carrot-and-stick approach to artificial intelligence with this action. Disney accused Alphabet’s Google, the biggest company involved, of using copyrighted content to train its models and permitting output that violates copyrights. The company included numerous pictures and screenshots of Gemini, Nano Banana and Veo outputs featuring characters like Spider-Man, Darth Vader and Homer Simpson in its letter. A Google representative did not immediately answer a request for comment.
Disney will receive payment from OpenAI for the inclusion of characters in Sora, according to a person familiar with the situation, though neither company has disclosed the exact amount. Additionally, Disney is getting warrants that let it buy more OpenAI shares at the company’s current $500 billion valuation.
Mickey Mouse, Elsa, and Black Panther are among the characters that Sora users will be able to access. Both businesses are able to avoid complicated rights and compensation negotiations because the agreement does not include actor likenesses or voices. According to the informed person, the agreement also places limitations on what Disney characters can do in Sora-generated content, particularly with regard to drugs and alcohol, sex, and interactions with non-Disney intellectual property.
Featured Image Credit: Craig Adderley; Pexels: Thank you!
