On Thursday, Disney and OpenAI announced a deal that might have seemed unimaginable or impossible not too long ago. Starting next year, OpenAI will officially be able to use iconic Disney characters such as Mickey Mouse, Ariel, and Yoda in its advanced video generation model “Sora”. As part of the agreement, Disney will acquire a $1 billion stake in the company, and its employees will have access to the company’s APIs and ChatGPT.
Article contents:
- Surprise strategic shift: Disney changes the rules of the game
- Licensing vs. litigation: A dual approach
- Solving the legal “Snoopy problem”
- A shared creative future: New stories
- Hedging bets: Investing in the unknown
- Frequently asked questions
Surprise strategic shift: Disney changes the rules of the game
Disney has always been a notoriously aggressive plaintiff and fierce guardian of its intellectual property. Alongside fellow IP powerhouse Universal, it sued Midjourney in June over outputs allegedly infringing on classic film and television characters. In a striking irony, on the night before the OpenAI deal was announced, Disney reportedly sent a cease-and-desist letter to Google alleging “widespread” copyright infringement in its models.
Licensing vs. litigation: A dual approach
On the surface, there appears to be clear dissonance in Disney embracing OpenAI while attacking its competitors legally. However, Hollywood is likely embarking on a strategic path similar to media publishers when it comes to artificial intelligence, signing lucrative licensing agreements wherever possible and using the weapon of litigation when an agreement cannot be reached. Matthew Sag, a professor of law and artificial intelligence at Emory University, says: “I think AI companies and copyright holders are beginning to understand and come to terms with the fact that neither side is going to score an absolute victory, so compromise is the way forward.”
Solving the legal “Snoopy problem”
Reaching a formal agreement on outputs solves a set of messy and potentially technically unsolvable issues. Even if a company asks an AI model not to generate the character Elsa from Frozen, the model may know enough about Elsa’s descriptions to do so anyway—or a user might be able to “prompt engineer” and craft their request in a way that makes Elsa appear without requesting the character by name explicitly. Legal scholars call this tension the “Snoopy problem” (or the Disney problem in this case), where it is difficult to prevent a model from drawing a very famous character it has been heavily trained on. The deal solves this by legalizing the use rather than attempting an impossible ban.
A shared creative future: New stories
By partnering with OpenAI, Disney gains a voice and control over how its characters are used in Sora. The streaming platform Disney+ will feature a select collection of fan-inspired “Sora short videos”, a new and experimental form of storytelling for the 102-year-old studio. With access to OpenAI’s advanced tools, it can try to ensure it does not fall behind the AI-generated entertainment revolution, which could change the face of cinema forever.
Hedging bets: Investing in the unknown
The $1 billion stake in OpenAI also serves as a strategic hedge. Just last year, Disney invested $1.5 billion in Epic Games, the developer of Fortnite. As entertainment preferences continue to flow from big screens (cinema and television) to smaller screens and interactive experiences, both OpenAI and Epic give Disney an opportunity to meet its customers wherever they are—or wherever they are heading in the future.
Frequently asked questions
Q: What is OpenAI’s “Sora” model?
A: Sora is an advanced AI model capable of turning text into realistic, high-quality video clips, revolutionizing the video industry.
Q: Why did Disney decide to collaborate instead of just litigating?
A: Disney realized that AI is an unavoidable reality, and that partnership gives it better control over how its characters appear while generating financial returns.
Q: Will we see full AI Disney movies?
A: The deal currently discusses short clips and interactive content, but Disney seeks to use the tools to enhance creativity.
