Disney has become the first major Hollywood studio to fully embrace the AI video revolution.
entertainment giant Announces $1 billion investment in OpenAI To bring your famous characters to your AI video generation tool Sora.
But it’s not getting cozy with all AI companies: At the same time it was striking a deal with OpenAI, Disney sent a cease and desist letter Google, accusing the AI tech giant of “massive” copyright infringement.
To find out what this means for the future of media, entertainment, and intellectual property, I spoke with Paul Roetzer, founder and CEO of SmarterX and the Marketing AI Institute. Episode 186 of the Artificial Intelligence Show.
redemption
under new three year agreementDisney will invest $1 billion in OpenAI and give the company access to its vast library of popular TV and movie characters. In return, Disney said it gets the right to purchase additional OpenAI stock at a set price.
Starting next year (2026), Sora users will be able to create short videos featuring over 200 characters from the Disney, Pixar, Marvel, and Star Wars franchises.
When cleaning, the agreement has restrictions:
- No human talent: This explicitly excludes the use of human likenesses or voices.
- Fan Integration: A selection of fan-inspired, Sora-generated clips will be streamed on Disney+.
- security control: OpenAI and Disney have committed to “robust controls” to ensure that children’s characters like Mickey Mouse will not do anything inappropriate.
AI-powered storytelling
This is a historic moment: A legacy media giant has effectively validated generic AI by opening up its famous library to an AI company.
Disney has framed the partnership as a responsible way to tell a story. But not everyone gets this privilege.
Disney accused Google’s Gemini model of acting as a “virtual vending machine” for its copyrighted works, alleging that Google uses Disney content to train its models without permission.
Disney says Google’s AI-generated images are not only a copyright violation, but misleading because they include the Gemini logo, which falsely implies endorsement.
So how is OpenAI, which did similar work to Google before this deal, able to skate free? There are billions of reasons, says Roetzer,
He says, “My impression here is that basically the same deal is on the table for Google, and they haven’t reached an agreement yet.”
There is deep hypocrisy in this scenario.
For years, artists and creators have complained that AI companies have trained their models with their work without consent. Now, the world’s largest AI company has validated that model for a hefty fee.
“I had Tweeted: “Such an interesting legal and business case: use IP without permission to train AI models, get rewarded with $1 billion equity and licensing deals,” Roetzer says.
Disney’s move confirms that the “original sin” of training on copyrighted data can be forgiven if the check is big enough.
You can’t “un-train” a model
The most important aspect of this story is the technical reality of how these models work.
Even if Google bows to legal pressure from Disney, or if Disney tries to limit OpenAI to only “authorized” uses, the underlying models have already consumed the data. You cannot easily remove specific characters from the neural network’s knowledge base.
are they can do Guardrails are the creation of filters that refuse to generate Mickey Mouse unless the user has legal permission. But the knowledge is already implicit.
put a stop to it
The OpenAI deal shows that we are moving from the era of open experimentation to the era of walled gardens and high-stakes licensing. For giants like Google, Meta and OpenAI, this is the cost of doing business. They have the capital to pay the “Disney Tax”.
But for smaller startups like MidJourney or Runway, the future looks much more uncertain. If they can’t afford the billions of dollars in licensing fees, they could be put out of business.
“Except for the Supreme Court decision that said models were allowed to be trained on other people’s intellectual property, I don’t know how it doesn’t end up in licensing deals or putting people out of business,” Roetzer says.
He predicts we will see a wave of acquisitions, where small AI video and image companies are bought not only for their technology, but for their talent, before the legal walls fall down their companies.
This Disney deal sets a precedent: If you have valuable intellectual property, you have litigation as a way to profit and licensing as a goal.
We are seeing the integration of the AI media landscape in real time. The technology is here to stay, but the right to use it is going to be very expensive.
“It will all culminate in a licensing deal,” Roetzer says. “There’s no way it’s going to turn into something else.”
