AI-generated image
Executive Summary
On December 11, 2025, The Walt Disney Company announced a landmark three-year licensing agreement with OpenAI, marking Disney as the first major content partner for OpenAI’s generative AI video platform, Sora. This deal allows Sora users to generate short, user-prompted videos featuring more than 200 animated, masked, or creature characters from Disney, Marvel, Pixar, and Star Wars franchises. Disney is also investing $1 billion in OpenAI equity, with warrants for additional shares, and will integrate OpenAI tools across its operations, including Disney+.
The partnership includes strict safeguards: no use of talent likenesses or voices, no training on Disney IP, and robust controls against harmful or inappropriate content. Curated fan-generated videos will stream on Disney+, aiming to enhance fan engagement while protecting creative rights.
This agreement represents a strategic shift for Hollywood, embracing generative AI through licensed collaboration rather than litigation. However, it has sparked debate, with supporters viewing it as innovative monetization and critics raising concerns about brand dilution, creator displacement, and ethical implications.
Key Facts About the Deal
Deal Structure
- Disney is making a $1 billion equity investment in OpenAI, with warrants to purchase additional equity.
- The partnership is a three-year licensing agreement, with exclusivity at the beginning of the agreement.
- Disney becomes the first major content licensing partner on Sora, OpenAI’s short-form generative AI video platform.
- Disney will also become a “major customer” of OpenAI, using its APIs to build new products, tools, and experiences including for Disney+.
- ChatGPT will be deployed for Disney employees.
What’s Included
- More than 200 animated, masked, and creature characters from Disney, Marvel, Pixar, and Star Wars.
- Characters include: Mickey Mouse, Minnie Mouse, Ariel, Belle, Cinderella, Simba, Mufasa, Baymax, Stitch, and characters from Frozen, Inside Out, Moana, Toy Story, Zootopia, and more.
- Animated/illustrated versions of Marvel characters: Black Panther, Captain America, Deadpool, Iron Man, Thor, Thanos, Groot, Loki.
- Star Wars characters: Darth Vader, Han Solo, Luke Skywalker, Leia, Yoda, the Mandalorian, Stormtroopers.
- Costumes, props, vehicles, and iconic environments are included.
- Users can create short, user-prompted social videos that can be viewed and shared.
- Curated selections of Sora-generated fan videos will be available to stream on Disney+.
What’s Excluded
- The agreement does NOT include any talent likenesses or voices.
- OpenAI is NOT allowed to use Disney intellectual property in training its AI models.
- Users cannot create long-form videos or feature-length content.
Timeline and Launch
- Sora and ChatGPT Images are expected to start generating fan-inspired videos with Disney’s licensed characters in early 2026.
Simultaneous Legal Action
- On the same day as the OpenAI announcement, Disney sent a cease-and-desist letter to Google, alleging copyright infringement on a “massive scale.”
- Disney and Universal had previously sued Midjourney in June 2025 for copyright infringement.
Arguments in Favor of the Deal (Disney & OpenAI)
The Disney & OpenAI Perspective
- Controlled Innovation: Disney CEO Bob Iger argues that this partnership allows Disney to “thoughtfully and responsibly extend the reach of our storytelling” rather than resisting technological change. By partnering, Disney secures a “seat at the table” to control how its intellectual property is used in the AI era, rather than fighting an endless battle against unauthorized models (Engadget, 2025).
- Empowering Fans: The companies position this as a tool for creativity, placing “imagination directly into the hands of Disney fans” to create personalized tributes and stories (The Guardian, 2025).
- Revenue & Growth: For OpenAI, this legitimizes their model with high-value, legally licensed data. For Disney, it opens a new revenue stream and keeps the brand relevant on social platforms where user-generated content dominates.
Arguments Against the Deal (Critics & Labor Unions)
The WGA, Unions & Critics Perspective
- “Theft” of Work: The Writers Guild of America (WGA) issued a statement condemning the deal, arguing that it “appears to sanction [OpenAI’s] theft of our work” by legitimizing a company built on scraping copyrighted data without consent (Fuster, 2025).
- Job Displacement: Critics and unions fear this devalues human artistry. By automating animation and storytelling with AI, they argue Disney is paving the way to reduce its reliance on human animators, writers, and VFX artists.
- Quality & Ethics: Critics describe the output as “AI slop”, soulless content that degrades the brand’s legacy. Advocacy groups like Fairplay also criticized the move as a “betrayal of countless children,” arguing it lures kids into using an unsafe platform (Newsday, 2025).
SAG-AFTRA (Screen Actors Guild)
SAG-AFTRA took a more measured but cautionary stance: “SAG-AFTRA will closely monitor the deal and its implementation to ensure compliance with our contracts and with applicable laws protecting image, voice, and likeness.”
The union acknowledged “months of frank discussions” with OpenAI about performer protections and noted that both Disney and OpenAI reached out to provide “assurances that they will meet their contractual and legal obligations to performers.”
Animation Guild
The Animation Guild’s Executive Board stated: “The announcement brings up serious questions regarding the impact on Guild members and consumers worldwide.”
“Disney is a cherished brand, in part, because of how fiercely it has protected its legacy. However, the unpredictability of generative AI is concerning and undermines both integrity and legacy, even with the most robust guardrails.”
They raised privacy concerns: “What of the likenesses of users or their children that are uploaded to Disney or Sora? Will these likenesses be protected? Will the studio pay users who create hit content or offer any compensation to the artists, writers, and technicians who helped create Disney’s beloved characters?”
Animation Guild President Sam Tung told Vulture: “It feels like Disney throwing in the towel.”
Industry Analysts & Child Safety Advocates
Creative Artists Agency (CAA): Previously criticized OpenAI for exposing artists to “significant risk” through Sora and questioned if creative professionals would be compensated for their work.
Emarketer Analyst Ross Benes: “An entertainment giant partnering with an AI company will inevitably invite backlash from labor groups in the entertainment industry. But unions’ power is limited and they will unlikely be able to stem the momentum of AI-produced media.”
Child Safety Concerns: Critics stated: “OpenAI claims children are prohibited from using Sora, yet here they are luring young kids to their platform using some of their favorite characters. Shame on the ‘House of Mouse’ for aiding and abetting OpenAI’s efforts to addict young children to its unsafe platform and products.”
Brand Dilution Risk: CNN analysis noted: “Allowing your most valuable IP to enter the world of AI slop, even if it’s sophisticated slop like Sora’s, risks diluting the brand and alienating the human creators behind the beloved characters.”
Hypocrisy Concerns: Critics pointed to the contradiction of Disney licensing IP to OpenAI on the same day it sent Google a cease-and-desist letter for similar AI-generated content, and just six months after suing Midjourney for essentially the same activity.
Social Media Reactions (X/Twitter)
The announcement generated significant discussion on X (formerly Twitter), with the DiscussingFilm post receiving over 2.1 million views and 1,500+ replies within hours:
@DiscussingFilm: “Disney has signed a deal with OpenAI & invested $1 billion into the company. Sora will now be able to AI generate videos based on animated, masked & creature characters from Disney, Marvel, Pixar & Star Wars. Curated selections of AI generated videos will be released on Disney+”
@Phil_Lewis_: “Disney and OpenAI sign a deal to bring more than 200 Disney characters to Sora. Disney makes $1 billion investment in OpenAI and is set to become a ‘major’ OpenAI customer” (472.8K views, 2.1K reposts)
@STockMKTNewz: “DISNEY AND OPENAI DEAL DIsney $DIS just announced an agreement with OpenAI for Disney to become the first major content licensing partner on Sora Disney will make a $1 billion equity investment in OpenAI, and receive warrants to purchase additional equity..”
@testingcatalog: “BREAKING: OpenAI is partnering with Disney and bringing Disney’s characters to Sora! Seems like Sora will be the next big social app.” (12.5K views)
@AndrewCurran_: “Disney is becoming an AI company, at this point it’s simply a matter of who they choose as a partner… as soon as Disney forms this partnership and starts using AI for user-created content… it will use its immense media power to broadcast that AI is a legitimate creative tool.”
References
Cane, J., & Fischer, S. (2025, December 11). Walt Disney to invest $1 billion in OpenAI, license characters for Sora. Axios. https://www.axios.com/2025/12/11/openai-disney-sora
Capoot, A. (2025, December 11). Disney making $1 billion investment in OpenAI, will allow characters on Sora AI video generator. CNBC. https://www.cnbc.com/2025/12/11/disney-openai-sora-characters-video.html
Daily Dot. (2025, December 11). Disney signs deal with OpenAI, disappointed fans react. https://www.dailydot.com/entertainment/disney-signs-deal-with-openai/
Engadget. (2025, December 11). Disney’s deal with OpenAI is about controlling the future of copyright. https://www.engadget.com/ai/disneys-deal-with-openai-is-about-controlling-the-future-of-copyright-213009504.html
Fuster, J. (2025, December 11). Unions raise flag on Disney–OpenAI deal’s infringement concerns: “Built its business off our backs”. TheWrap. https://www.thewrap.com/wga-disney-openai-deal-response/
The Guardian. (2025, December 11). Disney to invest $1bn in OpenAI, allowing characters in Sora video tool. The Guardian. https://www.theguardian.com/business/2025/dec/11/disney-open-ai-sora-video-deal
Hayden, E. (2025, December 11). Disney to invest $1 billion in OpenAI in major deal that boosts Sora in Hollywood. The Hollywood Reporter. https://www.hollywoodreporter.com/business/business-news/disney-to-invest-1-billion-in-openai-in-major-deal-that-boosts-sora-1236447942/
Kanter, J. (2025, December 11). Disney inks blockbuster $1B deal with OpenAI, handing characters over to Sora. Deadline. https://deadline.com/2025/12/disney-openai-deal-sora-1236645728/
Limbong, A. (2025, December 11). Billion-dollar OpenAI deal allows users to make content with Disney characters. NPR. https://www.npr.org/2025/12/11/nx-s1-5640837/disney-openai-sora-deal
Morrow, A. (2025, December 11). Disney’s OpenAI deal is a $1 billion hedge on the future of slop. CNN Business. https://www.cnn.com/2025/12/11/business/disney-openai-hedge
NBC News. (2025, December 11). Disney strikes deal with OpenAI to let Sora generate AI videos of its characters. NBC News. https://www.nbcnews.com/tech/tech-news/openai-disney-sora-ai-videos-rcna248617
Newsday. (2025, December 11). Disney invests $1B in OpenAI in deal to bring characters like Mickey Mouse to Sora AI video tool. Newsday. https://www.newsday.com/business/disney-openai-sora-ai-artificial-intelligence-i30773
OpenAI. (2025, December 11). The Walt Disney Company and OpenAI reach landmark agreement to bring beloved characters from across Disney’s brands to Sora. https://openai.com/index/disney-sora-agreement/
Spangler, T. (2025, December 11). Disney’s OpenAI deal “appears to sanction” AI company’s “theft of our work,” WGA says. Variety. https://variety.com/2025/digital/news/wga-disney-openai-deal-theft-of-our-work-1236606872/
The Walt Disney Company. (2025, December 11). The Walt Disney Company and OpenAI reach landmark agreement to bring beloved characters from across Disney’s brands to Sora. https://thewaltdisneycompany.com/disney-openai-sora-agreement/
