There had been plenty of speculation over how copyright issues would be handled in AI videos, and OpenAI has come up with a decisive strategy that gives it a big green light.
The Walt Disney Co. announced Thursday it will make a $1 billion equity investment in OpenAI and grant users permission to create videos featuring its copyrighted characters through the Sora video generation platform. The three-year licensing agreement will give Sora users access to more than 200 characters spanning Disney, Marvel, Pixar, and Star Wars franchises beginning next year.
The deal represents a significant milestone in the evolving relationship between traditional media companies and generative AI platforms. Since Sora’s September launch, the video generation app has faced intense scrutiny over copyright concerns, with users creating unauthorized content featuring popular brands and characters. The Motion Picture Association called for “immediate and decisive action” to prevent infringement in October, and OpenAI CEO Sam Altman acknowledged the need for more granular control over character generation.
Under the new agreement, Disney will receive warrants to purchase additional OpenAI equity and become a major customer of the AI company. Disney plans to deploy ChatGPT to its employees and collaborate on building new tools and experiences. The partnership will also enable users to generate Disney intellectual property through ChatGPT Images, and curated Sora videos will be available on Disney+.
“The rapid advancement of artificial intelligence marks an important moment for our industry, and through this collaboration with OpenAI we will thoughtfully and responsibly extend the reach of our storytelling through generative AI, while respecting and protecting creators and their works,” Disney CEO Bob Iger said in a statement.
Characters available through the deal include Mickey Mouse, Ariel, Cinderella, Iron Man, and Darth Vader, though the agreement explicitly excludes talent likenesses and voices. OpenAI has committed to maintaining robust controls to prevent illegal or harmful content generation.
The Broader Copyright Implications
This landmark deal signals a potentially transformative—and complicated—path forward for AI companies navigating intellectual property rights. While OpenAI has secured access to one of the world’s most valuable content libraries, the $1 billion price tag and formal licensing structure may actually create a chilling effect on the broader use of copyrighted materials in AI-generated content.
The Disney deal sets a precedent that could make AI video generation significantly more cumbersome for platforms seeking to offer comprehensive character libraries. If every major studio, production company, and character rights holder demands similar licensing agreements, AI companies could find themselves negotiating with thousands of individual rights holders—from major entertainment conglomerates to independent creators and celebrity estates.
This fragmentation would be particularly challenging given Disney’s notoriously strict stance on copyright protection. The company has a long history of aggressively defending its intellectual property, famously lobbying for copyright term extensions and pursuing legal action against unauthorized use of its characters. Just this week, Disney sent a cease and desist letter to Google alleging copyright infringement “on a massive scale,” claiming the tech giant used Disney’s works to train models without authorization.
Disney has also taken legal action against AI image creator Midjourney alongside Universal, and previously sent a cease and desist to Character.AI over unauthorized use of its characters. This aggressive posture suggests that rather than opening the floodgates for AI-generated content featuring copyrighted characters, the Disney-OpenAI deal may actually establish a new gatekeeping mechanism.
For other AI platforms unable or unwilling to pay billion-dollar licensing fees, the message is clear: using copyrighted characters without explicit permission invites legal risk. This could effectively create a two-tier system where well-funded AI companies with deep pockets can offer comprehensive character libraries through licensing deals, while smaller competitors are forced to operate with significant content restrictions.
The complexity multiplies when considering individual celebrities, athletes, musicians, and other public figures who control their own likeness rights — stars like Matthew McConaughey and Michael Caine have partnered with Eleven Labs to generate their voices using AI. Unlike corporate-owned characters that can be licensed through a single negotiation, AI companies would need to secure agreements with countless individuals—each with their own representatives, demands, and pricing structures.
The Disney-OpenAI partnership may have provided clarity on one approach to handling copyrighted content in AI video generation, but it has also illuminated just how expensive and complex that approach can be. Rather than resolving the copyright debate in AI, this deal may have simply shifted it from a legal battlefield to a negotiating table—one that requires billions of dollars to sit at.