Disney just became the first major Hollywood studio to fully embrace the AI video revolution.
The entertainment giant announced a $1 billion investment in OpenAI to bring its legendary characters to Sora, its AI video generation tool.
But it’s not getting cozy with all AI companies: At the same time it was inking a deal with OpenAI, Disney sent a cease-and-desist letter to Google, accusing the AI tech giant of copyright infringement on a “massive scale.”
To unpack what this means for the future of media, entertainment, and intellectual property, I spoke with SmarterX and Marketing AI Institute founder and CEO Paul Roetzer on Episode 186 of The Artificial Intelligence Show.
Quid Pro Quo
Under the new three-year agreement, Disney will invest $1 billion in OpenAI and provide the company access to its huge library of popular TV and movie characters. In return, Disney said it gets the right to purchase additional OpenAI stock at a set price.
Early next year (2026), Sora users will be able to generate short videos featuring more than 200 characters from the Disney, Pixar, Marvel, and Star Wars franchises.
While sweeping, the agreement does have restrictions:
- No Human Talent: It explicitly excludes the use of human likenesses or voices.
- Fan Integration: A selection of fan-inspired, Sora-generated clips will stream on Disney+.
- Safety Controls: OpenAI and Disney have committed to “robust controls” to ensure kid characters such as Mickey Mouse won’t do anything inappropriate.
Storytelling Powered by AI
It’s a landmark moment: a legacy media giant effectively validating generative AI by opening its legendary library to an AI company.
Disney frames the partnership as a responsible way to extend storytelling. But not everyone gets that privilege.
Disney accuses 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 generated are not only a copyright infringement but are misleading because they include the Gemini logo, which falsely implies an endorsement.
So how is OpenAI, who did the same thing as Google prior to this agreement, able to skate free? There are a billion reasons, Roetzer says,
“My assumption here is basically the same deal is on the table for Google, and they haven’t arrived at an agreement yet,” he says.. “So now they’re just forcing a deal.”
There is a profound hypocrisy in this scenario.
For years, artists and creators have complained that AI companies trained their models with their work without consent. Now, the biggest AI company in the world has validated that model, for a huge fee.
“I had tweeted: “Such a fascinating legal and business case: Use IP without permission to train AI models, get rewarded with $1 billion equity and licensing deals,” says Roetzer.
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
One of the most important aspects of this story is the technical reality of how these models work.
Even if Google bows to Disney’s legal pressure, or if Disney tries to restrict OpenAI to “authorized” uses only, the underlying models have already consumed the data. You cannot easily remove specific characters from a neural network’s knowledge base.
What they can do is build guardrails, filters that refuse to generate Mickey Mouse unless the user has legal permission. But the knowledge is already baked in.
Reining It In
The OpenAI deal demonstrates that we are moving from an era of open experimentation to one of walled gardens and high-stakes licensing. For giants such as Google, Meta, and OpenAI, this is the cost of doing business. They have the capital to pay the “Disney tax.”
But for smaller startups, such as Midjourney or Runway, the future looks much more precarious. If they cannot afford billion-dollar licensing fees, they may simply be litigated out of business.
“Barring a Supreme Court decision that says the models were allowed to be trained on other people’s intellectual property, I don’t know how it doesn’t end in licensing deals or people being put out of business,” says Roetzer.
He predicts we will see a wave of acquisitions, where smaller AI video and image companies are bought up not just for their tech, but for their talent, before the legal walls take their companies down.
This Disney deal has set that precedent: If you have valuable intellectual property, you have a path with litigation as the leverage, and licensing as the goal.
We are watching the consolidation of the AI media landscape in real-time. The technology is here to stay, but the right to use it is about to become very expensive.
“This will all end in a licensing deal,” says Roetzer. “There’s no way that this becomes anything else.”
