- OpenAI announced Thursday it had struck a deal to license Disney's characters and other IP.
- It's a major shift for Disney, which has historically been deeply protective of its IP.
- One media expert said that Disney was solving two big problems with this partnership.
It's likely just a matter of time before we see the wisened duo of Rafiki and Jiminy Cricket weilding lightsabers on the icy plains of Arendelle.
That's courtesy of artificial intelligence, of course, and a new deal between Disney and OpenAI.
OpenAI said Thursday it had struck a licensing agreement to use Disney's characters and other intellectual property. Disney will also invest $1 billion in OpenAI and will purchase ChatGPT Enterprise for its employees.
It's a major shift for Disney, which has historically been deeply protective of its intellectual property. And it's a big win for OpenAI, which is on a quest for more content to feed its AI models.
For users, the deal will enable them to recreate Disney characters on Sora, OpenAI's short-form video generation app, and to create images of Disney characters using ChatGPT.
Beyond the limitless possibilities for creative content, the deal reveals a lot about Disney's strategy in the AI age and the impact of artificial intelligence on the future of entertainment.
Here's what some smart people in media, tech, and business are saying about the deal.
Nick Cicero, entrepreneur and digital strategist
For Nick Cicero, the founder of Delmondo, a social media video analytics company that was acquired by Conviva in 2018, Disney's deal with OpenAI is less about AI and more about revenue.
Cicero argued in an X post on Thursday that Disney was aiming to solve two "existential" problems: creators using unauthorized Disney content and kids watching YouTube instead of Disney+.
"Sora gives Disney its first scalable way to pull creator-made content into its own premium ecosystem — brand-safe, trackable, legal, and ready for CTV monetization," he said, referring to the practice of delivering targeted advertising to internet-connected televisions.
"This move isn't about tech," he added. "It's about revenue physics."
Peter Csathy, media consultant
Chatbots like ChatGPT rely on data to power their outputs, and when it comes to collecting that data, AI companies are insatiable.
The drive to collect data often pits AI companies against content creators. Numerous media companies have sued OpenAI, Anthropic, Perplexity, and other leading AI outfits for using their copyrighted content without permission. Other media companies, like Business Insider's parent company, Axel Springer, have struck deals with AI companies to license their content.
Peter Csathy, a longtime media consultant and analyst, said Disney's deal with OpenAI is a "watershed" moment for AI and media licensing.
"Now THIS is a generative AI use that makes sense to me and I support," Csathy wrote on LinkedIn. "Fully licensed characters, thereby respecting copyright and embracing partnership with the creative community (rather than theft of IP). New revenue streams for IP rights-holders. And overall delight by fans of those beloved characters."
Caroline Giegerich, AI and marketing strategist
There are just so many cease-and-desist letters a media lawyer can send.
Carline Giegerich, a vice president at the Interactive Advertising Bureau who once led emerging tech at HBO, says Disney's deal with OpenAI feels like a "can't beat 'em, join 'em" moment.
"When I was at HBO from '05 - '09, I marveled at the sheer volume of cease and desists from the legal team when mobile video was up and coming," she wrote on LinkedIn. "I thought it seemed difficult to fight against the entire internet, and it turns out it was. And AI presents a similar challenge."
She also said the deal presents a valuable marketing opportunity for Disney.
"Important to note that a selection of these fan-created videos will be available to stream on Disney+. What that means to me is that Disney sees this also as a marketing and content opportunity, which it is," she said.
James Miller, head of business development at Amazon
Disney's pivot from aggressively defending its IP at every turn to giving it over to the world's leading AI startup might be strategic for another reason.
James Miller, the head of business development at Amazon for media, entertainment, and Amazon Creators, said he suspects it's a matter of "controlling the inevitable."
Any IP eventually enters the public domain. In 2024, the copyright for Mickey Mouse himself — at least the sans white gloves version of the 1930s — expired, allowing anyone to use his likeness. Winnie the Pooh, Snow White, Cinderella, and a handful of other Disney characters also entered the public domain at the same time.
"By officially licensing these characters now, Disney does three things," Miller wrote on LinkedIn. "1. Monetizes the AI trend rather than just fighting it in court. 2. Sets the quality standard for how their characters appear in AI video (likely drowning out lower-quality unauthorized versions). 3. Captures data on how fans want to use their IP before they lose exclusive rights."
Karl Haller, partner and Consumer Center of Competency leader at IBM
One consumer expert said that Disney might have gotten the short end of the stick in this partnership.
"Looks like OpenAI used the #jedimindwarp on The Walt Disney Company, not the other way around," Karl Haller, an IBM partner and the leader of the firm's Consumer Center of Competency, said in a post on LinkedIn.
He said he was "more than a bit surprised" to see that Disney is letting OpenAI license its IP for Sora and other AI tools, with some of the videos being made available to stream on Disney+.
"And what does Disney receive for this? Negative $1 billion," he wrote. "Rather than receiving a heftly license fee, Disney is instead investing $1B in OpenAI and receiving warrants to buy more in the future."
Simon Pullman, entertainment co-chair at Pryor Cashman
One entertainment lawyer pointed out that the deal comes with a lot of unanswered questions.
"This is a fairly stunning story all round with many questions," Simon Pullman, a partner at law firm Pryor Cashman, wrote on LinkedIn on Thursday.
"Will audiences want/accept 'AI UGC' on Disney Plus," he wrote, referring to user-generated content. "Will it be possible for Disney to unring the bell after three years and not extend the license? How will they protect against misuse and brand damage?"
Mike Walsh, technological change consultant and author
Disney's $1 billion bet on AI is the right move for the media giant, according to Mike Walsh, the CEO of consulting firm Tomorrow.
"By partnering with OpenAI while suing Midjourney and warning Google, Disney is drawing a clear line," Walsh wrote on LinkedIn on Thursday. "Remix culture isn't going away, but it will be licensed, governed, and designed on its terms."
He added that Disney has always survived new media eras with this strategy.
"The future of entertainment belongs to companies that shape participation instead of fighting it," he wrote.
The post What smart people are saying about Disney's licensing deal with OpenAI appeared first on Business Insider