OpenAI and Disney just ended the ‘war’ between AI and Hollywood with their $1 billion Sora deal—and OpenAI made itself ‘indispensable,’ expert says

Disney’s $1 billion investment in OpenAI, announced Thursday morning—and its decision to let more than 200 Disney, Pixar, Marvel, and Star Wars characters appear inside the Sora video generator—is more than a licensing deal. According to copyright and AI law expert Matthew Sag, who teaches at Emory University’s law school, the deal marks a strategic realignment that could reshape how Hollywood protects its IP in the face of AI-generated content that threatens to leech their legally protected magic. 

“AI companies are either in a position where they need to aggressively filter user prompts and model outputs to make sure that they don’t accidentally show Darth Vader, or strike deals with the rights holders to get permission to make videos and images of Darth Vader,” Sag told Fortune. “The licensing strategy is much more of a win-win.” 

The three-year agreement gives OpenAI the right to ingest hundreds of Disney-owned characters into Sora and ChatGPT Image. Disney will also receive equity warrants and become a major OpenAI customer, while deploying ChatGPT internally.

Sag said the deal itself will be a kind of “revenue-sharing.”

“OpenAI ha...