Disney drops $1B in OpenAI to License AI Videos With Iconic Characters

The Walt Disney Company has entered a major three year partnership with OpenAI that signals a turning point for how generative artificial intelligence and Hollywood’s most valuable intellectual property may coexist. 

Announced on December 11, the agreement includes a $1 billion US equity investment from Disney into OpenAI and grants permission for OpenAI’s Sora tool to generate AI videos using licensed Disney characters (TechCrunch). The deal reflects Disney’s effort to shape how its characters appear in AI generated content, rather than attempting to block the technology outright.

Sora, which officially launched in September after being previewed earlier in the year, allows users to create short videos from simple text prompts. Under the new agreement, users will be able to generate videos featuring more than 200 characters from Disney, Pixar, Marvel, and Star Wars. These include classic and modern favorites such as Mickey Mouse, Ariel, Belle, Cinderella, Simba, Baymax, and characters from Frozen, Toy Story, Moana, Inside Out, and Encanto, along with illustrated or animated versions of Marvel and Lucasfilm characters like Iron Man, Captain America, Black Panther, Deadpool, Groot, Darth Vader, Han Solo, and Stormtroopers (TechCrunch). The licensing also covers costumes, props, vehicles, and iconic environments tied to these franchises.

The agreement extends beyond video generation. Disney characters will also be available through ChatGPT Images, OpenAI’s image generation feature, using the same licensed intellectual property. Disney confirmed that the deal excludes talent likenesses and voices, an important distinction amid ongoing debates about performer rights. OpenAI and Disney both emphasized that safeguards will remain in place to prevent unlawful or harmful content, and that the collaboration is designed to respect creators and the broader creative industry (Yahoo).

Beyond consumer facing tools, Disney plans to become a major OpenAI customer. The company will use OpenAI’s APIs to build new internal and external products, tools, and experiences, including offerings tied to Disney+ (TechCrunch). Some user generated videos created with Sora are expected to be available for streaming on Disney+, and Disney will roll out ChatGPT internally for employees as part of broader experimentation with AI powered workflows. Sora and ChatGPT Images are expected to begin generating fan requested videos using licensed Disney characters in early 2026, marking a gradual rollout rather than an immediate release (CBC).

Disney CEO Bob Iger described the partnership as a responsible way to extend Disney’s storytelling through generative AI while protecting creative work, while OpenAI CEO Sam Altman called Disney the global gold standard for storytelling and said the agreement demonstrates how AI companies and creative leaders can collaborate responsibly (TechCrunch). Industry observers echoed that sentiment, with former Disney and ABC executives noting that the deal allows Disney to maintain control over how its characters appear in the AI ecosystem rather than losing influence to unlicensed platforms (CBC).

The move is especially notable given Disney’s recent legal actions against generative AI companies. The company has sued Midjourney over alleged intellectual property violations and issued cease and desist demands to Character.AI for using Disney characters without permission (TechCrunch). At the same time, the partnership has reignited criticism from parts of the creative community. Creative Artists Agency previously warned that Sora exposes artists to significant risk, questioning whether creators would be properly compensated and credited (CBC). Despite those concerns, Disney’s OpenAI deal underscores a broader shift in Hollywood toward engaging with generative AI on negotiated terms, potentially reshaping how entertainment content is created, distributed, and experienced.

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Works Cited

TechCrunch. “Disney Signs Deal With OpenAI to Allow Sora to Generate AI Videos Featuring Its Characters.” TechCrunch, 11 Dec. 2025, https://techcrunch.com/2025/12/11/disney-signs-deal-with-openai-to-allow-sora-to-generate-ai-videos-featuring-its-characters/.

United Press International. “Disney Invests $1B in OpenAI, Allows Sora Character Videos.” Yahoo Finance, 11 Dec. 2025, https://ca.finance.yahoo.com/news/disney-invests-1b-openai-allows-165327488.html.

CBC News. “Disney to Invest $1B US in OpenAI, License Marvel, Star Wars Characters for Sora Tool.” CBC, 11 Dec. 2025, https://www.cbc.ca/news/business/disney-openai-1b-deal-star-wars-marvel-9.7011798.

Lawler, Richard. “OpenAI’s Billion-Dollar Disney Deal Puts Mickey Mouse and Marvel in Sora.” The Verge, 11 Dec. 2025, www.theverge.com/news/842348/disney-openai-sora-chatgpt-images. 

Choudhary, Govind. “Disney Brings Mickey, Simba and More Iconic Characters to OpenAI’s Sora AI Videos: What’s Allowed and What’s Off-Limits.” LiveMint, 12 Dec. 2025, www.livemint.com/technology/tech-news/disney-brings-mickey-simba-and-more-iconic-characters-to-openais-sora-ai-videos-what-s-allowed-and-what-s-offlimits-11765513586114.html.