Disney and OpenAI Forge USD$1 Billion AI Partnership, Licensing Characters for Generative AI

Walt Disney has announced a three year partnership with OpenAI, committing to a USD$1 billion investment while simultaneously licensing its globally recognised characters for use in the startup’s Sora AI video generator. This deal, unveiled on December 11th, allows the AI tools to utilise characters from major franchises including Star Wars, Pixar, and Marvel, marking a pivotal moment in Hollywood’s reluctant yet necessary embrace of generative artificial intelligence. The collaboration is expected to reshape how content is produced, significantly sidestepping long-standing industry concerns regarding intellectual property rights and the impact of AI on creative jobs.

Walt Disney's Franchises Include Marvel, Star Wars & Pixar

As part of the licensing agreement, Sora and ChatGPT Images are slated to begin generating videos featuring iconic Disney characters such as Mickey Mouse, Cinderella, and Mufasa starting early next year. Importantly, the agreement strictly excludes the use of any talent likenesses or voices. According to Disney CEO Bob Iger, this partnership will thoughtfully and responsibly extend the reach of the company’s storytelling through generative AI, all while maintaining respect for and protection of creators and their works. The collaboration stems from years of discussions between Iger and OpenAI's Sam Altman, who explored ways to showcase the potential of generative AI when combined with Disney’s extensive library of characters and stories. Iger had already previewed elements of this strategy back in November, discussing plans to offer Disney+ users tools to create and consume user generated content, particularly in short form.

The strategic scope of the agreement extends beyond customer facing video generation. Disney will receive warrants to purchase additional equity in the ChatGPT maker. The two companies plan to utilise OpenAI’s models to develop new products and customer experiences specifically for Disney+ subscribers. Furthermore, Disney intends to deploy ChatGPT for its internal employees and use OpenAI’s tools to support film production, aiming to achieve efficiency gains. To address potential IP concerns, the agreement includes essential guardrails designed to protect against Disney characters being depicted in inappropriate situations.

This move to secure IP comes after Disney previously filed a copyright lawsuit against the AI photo generation firm Midjourney in June, and reportedly sent a cease and desist letter to Google alleging copyright infringement. A selection of the videos created by users using the licensed characters will be made available for streaming on Disney+, which will allow the platform to capitalise on the growing appeal of short form video content.

While Disney presents the deal as responsible, Hollywood’s unions have reacted with caution. The Writers Guild of America (WGA) leaders criticised the deal, stating that Disney’s announcement appears to sanction the theft of members' labor and cedes value to a tech company that has built its business off the backs of writers. Similarly, the president of the Animation Guild, Danny Lin, stated that compensation for artists remains a significant concern, emphasising that while animators do not own the rights to the characters, they are certainly the reason the characters exist and possess such earning potential.

However, SAG AFTRA, which represents actors and other entertainment workers, confirmed that both Disney and OpenAI contacted the union to offer assurances that the deal would ensure the ethical and responsible use of the technology. The union noted that this ongoing dialogue reflects a significant commitment to factoring in SAG AFTRA members' concerns regarding protective measures applied to image, likeness, voice, performance, and intellectual property rights generally. Despite these efforts, Emarketer analyst Ross Benes suggested that the unions’ power is limited and that they will be unlikely to successfully stem the momentum of AI produced media.

Source: Reuters