Has Disney sold its soul in deal with OpenAI's Sora?

Just months ago, it seemed Disney might make a stand for artists everywhere when it sued Midjourney, the company behind one of the most popular AI image generators. But it's become clear that the animation giant doesn't have a problem with AI per se; it was just waiting for a deal so it could get something out of the tech too.

The animation giant has now signed an agreement with OpenAI, allowing the company to use over 200 of its characters in Sora, the controversial AI video generator and 'fake social media' app. And it could be the deal that changes entertainment as we know it.

OpenAI's launch of Sora 2 and the Sora iPhone app in October became a shambles when it backtracked on its intention to allow video generations with copyright IP by default. CEO Sam Altman expressed surprise when media companies and the Motion Picture Association said they weren't happy with their IPs appearing in an app that allowed people to generate videos of things like a Nazi SpongeBob SquarePants, racist depictions of Martin Luther King Jr and ads for 'Epstein Island' children’s toys.

The company, which also owns ChatGPT, backed down and said it would only allow copyright IPs to be used when their owners opted in. Just two months later, Disney has opted in big time.

Under a three-year licensing deal, Sora users will be able to generate short videos featuring Disney, Marvel, Pixar and Star Wars characters, from Mickey Mouse to Lilo and Stitch, Black Panther, Deadpool, Darth Vadar and characters from Frozen, Inside Out, Moana, Toy Story, Zootopia, and many more.

Disney has a difficult relationship with generative AI art so far. It's been reported that several Disney attempts to use AI were abandoned over legal issues and concerns from actors, while LucasFilm's AI Star Wars movie was just embarrassing. The deal with OpenAI doesn't cover human actors or voices, but people will also be able to put themselves into the videos with Disney characters.

On top of that, Disney's going to invest $1bn in OpenAI, giving it equity in a company that expects to continue making a loss until the end of the decade. And to protect the deal, Disney has reportedly sent a cease-and-desist letter to Google asking it to stop allowing its Gemini AI image generator to reproduce Disney characters.

What's in it for Disney? It will get to use OpenAI’s application programming interfaces to build new products and tools, and select videos made by Sora users will be available for streaming on Disney+. This follows a recent licensing agreement with Epic Games, the developer of Fortnite, to add game-like features to the streaming service.

Walt Disney Company CEO Robert Iger says that “bringing together Disney’s iconic stories and characters with OpenAI’s groundbreaking technology puts imagination and creativity directly into the hands of Disney fans in ways we’ve never seen before, giving them richer and more personal ways to connect with the Disney characters and stories they love.”

But it sounds a lot like Disney's going to surrender quality IPs and get AI slop in return.