on Thursday, Disney and OpenAI announced an agreement that might have seemed unthinkable not long ago. Starting next year, OpenAI will be able to utilize Disney characters such as Mickey Mouse, Ariel and Yoda in its Sora video generation model. Disney will acquire a $1 billion stake in OpenAI, and its employees will have access to the company’s APIs and ChatGPT. None of this makes much sense – unless Disney was fighting a battle it couldn’t win.
Disney has always been a notoriously aggressive litigant in disputes over its intellectual property. Along with fellow IP powerhouse Universal, it sued Midjourney in June over output that allegedly infringed on classic film and TV characters. Disney reportedly a day before announcing the OpenAI deal sent a letter suspending operations to Google, alleging copyright infringement on a “massive scale.”
On the surface, there seems to be some dissonance with Disney embracing OpenAI while nudging rivals. However, it is more than likely that Hollywood is following a similar path to media publishers when it comes to artificial intelligence, signing licensing agreements where possible and pursuing legal proceedings when not possible. (WIRED is owned by Condé Nast, which signed an agreement with OpenAI in August 2024)
“I think AI companies and copyright holders are starting to understand and come to terms with the fact that neither side will win absolutely,” says Matthew Sag, a professor of law and artificial intelligence at Emory University. While many of these cases are still pending in the courts, so far it appears that the model inputs – the training data from which these models learn – fall under fair utilize. But this deal is about results – what the model returns based on your prompt – where IP owners like Disney have a much stronger case
Coming to agreement on outcomes solves a lot of messy, potentially unsolvable problems. Even if a company tells an AI model not to produce, say, an Elsa at a Wendy’s drive-thru, the model might still know enough about Elsa to do so – or the user might be able to tell it the way to create Elsa without asking for the character’s name. This is a tension that lawyers call ” “The Problem with Snoop” but in this case you might as well call it a Disney problem.
“With an increasingly clear reality for AI companies and consumer-facing entertainment giants like Disney, it makes sense to consider licensing arrangements,” Sag says.