{"id":339683,"date":"2025-12-12T04:34:13","date_gmt":"2025-12-12T04:34:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/339683\/"},"modified":"2025-12-12T04:34:13","modified_gmt":"2025-12-12T04:34:13","slug":"disneys-openai-deal-is-a-1-billion-hedge-on-the-future-of-slop","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/339683\/","title":{"rendered":"Disney\u2019s OpenAI deal is a $1 billion hedge on the future of slop"},"content":{"rendered":"

\n A version of this story appeared in CNN Business\u2019 Nightcap newsletter. To get it in your inbox, sign up for free here<\/a>.\n<\/p>\n

New York
\n \u00a0\u2014\u00a0<\/p>\n

\n On the surface of it, Disney\u2019s plan to invest $1 billion in OpenAI<\/a> while licensing its characters to Sora looks a bit like Goliath capitulating to David. Why would Disney open its precious intellectual property to the masses to do whatever they please? The same IP its lawyers historically would have sued you over if you so much as thought of baking a cake in Simba\u2019s likeness for your kid\u2019s \u201cLion King\u201d-themed birthday party?\n <\/p>\n

\n And why would it license that IP to OpenAI on the same day that it sent a cease-and-desist letter to Google<\/a>, claiming the search giant was infringing on Disney copyrights on a \u201cmassive scale?\u201d This is the same Disney that just six months ago teamed up with Universal to sue Midjourney<\/a>, another generative artificial intelligence company, for doing essentially what people using Sora will now be able to do with Disney\u2019s blessing.\n <\/p>\n

\n The answer is that Disney needed a hedge on the future of AI.\n <\/p>\n

\n After all, the outlook for the technology is murky at best, and investors are increasingly questioning the wisdom of the industry\u2019s \u2013 and particularly OpenAI\u2019s \u2013 massive spending commitments.\n <\/p>\n

\n But the global entertainment behemoth can\u2019t be seen missing the boat if the tech does end up transforming the way people create and engage with the world. And Disney, being Disney, found a way to have a seat at the table without opening another legal battlefront.\n <\/p>\n

\n Much like Goldilocks \u2013 an IP that Disney does not own, thank you very much \u2013 OpenAI is just right for the House of Mouse.\n <\/p>\n

\n \u201cI think that Midjourney is too small\u2026 and Google is probably too big,\u201d Matthew Sag, a professor of law in AI and machine learning at Emory University, said in an email. \u201cDisney and Google bump heads on so many issues (just think of YouTube<\/a>) that it would take forever to resolve all of the commercial conflicts. Also it\u2019s hard to imagine Disney getting an equity stake in Google.\u201d\n <\/p>\n

\n To be clear: Disney is not handing the keys to its IP over to OpenAI indefinitely. In an interview with CNBC<\/a>\u2019s \u201cSquawk on the Street\u201d Thursday, Disney CEO Bob Iger clarified that the three-year licensing deal comes with only about a year of exclusivity for OpenAI. After that, Disney can shop its IP to other AI companies.\n <\/p>\n

\"Disney<\/p>\n

\n And, crucially, Disney is not including the characters\u2019 voices in the deal \u2014 a fact Iger emphasized more than once in the interview alongside OpenAI CEO Sam Altman. (That\u2019s a very Ursula move. Ariel did fine without her voice, of course, but a bunch of AI-generated Moanas who can\u2019t sing or Yodas who can\u2019t speak seem like they\u2019d get super boring, super fast. On the other hand, next time you hear Donald Duck he might sound a bit different. Maybe even more eloquent?)\n <\/p>\n

\n \u201cWe have always viewed technological advance as opportunity, not threat,\u201d Iger told CNBC. \u201cNo human generation has ever stood in the way of technological advance, and we don\u2019t intend to try.\u201d\n <\/p>\n

\n So to sum up: Disney gets to put some limits around how its characters appear on Sora, collects licensing fees from OpenAI, and \u2014 icing on the cake \u2014 gets $ 1 billion worth of equity in one of the biggest startups on the planet.\n <\/p>\n

\n OpenAI? It gets to feed its AI video generator some 200 Disney characters that users will be able to manipulate in just about any way they\u2019d like. It also gets some much needed cash, though $1 billion isn\u2019t much compared to the $1.4 trillion it owes to various companies over the next few years.\n <\/p>\n

\n Perhaps most importantly for OpenAI, it gets to be not sued by Disney, at least for a while.\n <\/p>\n

\n Iger\u2019s strategy isn\u2019t without risk. Allowing your most valuable IP to enter the world of AI slop <\/a> \u2014 even if it\u2019s sophisticated slop like Sora\u2019s \u2014 risks diluting the brand and alienating the human creators behind the beloved characters. But Iger appears to be wagering that the IP could be vulnerable either way if generative AI becomes as powerful and popular as evangelists like Altman say it will. And for the bargain price of $1 billion, he\u2019s able to get a seat the table.\n <\/p>\n

\n The deal offers Disney OpenAI\u2019s assurance that it won\u2019t let users generate illegal, harmful or age inappropriate content, the companies said. Iger also emphasized on CNBC that being on Sora doesn\u2019t mean people will be able to make their own feature-length \u201cRatatouille\u201d fanfic videos, or anything like that.\n <\/p>\n

\n \u201cLet\u2019s be mindful of the fact that these are 30-second videos. We\u2019re not talking about creating either shorts or movies,\u201d Iger said. \u201cThis is a way for us as a company really to provide experiences to particularly younger audiences engaging with our characters in new ways.\u201d\n <\/p>\n

\n (Translation: Sora ain\u2019t exactly Pixar, folks \u2014 it is a toy for children. At least, for now.)\n <\/p>\n

\n Bottom line: Disney and Iger see in OpenAI a popular brand with lots of potential, but one that they can push around relatively easily. OpenAI, which has never turned a profit and desperately needs consumers willing to pay for its products, needs Disney far more than Disney needs OpenAI.\n <\/p>\n","protected":false},"excerpt":{"rendered":"A version of this story appeared in CNN Business\u2019 Nightcap newsletter. To get it in your inbox, sign…\n","protected":false},"author":2,"featured_media":339684,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,276,277,49,48,61],"class_list":{"0":"post-339683","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-ca","12":"tag-canada","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/339683","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=339683"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/339683\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/339684"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=339683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=339683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=339683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}