Disney Strikes Landmark AI Deal With OpenAI While Targeting Google Over Copyright

Key takeaways

The Walt Disney Company announced on December 11, 2025, that it will invest $1 billion in OpenAI and become the first major content licensing partner for Sora, OpenAI's short-form video generation platform.

The three-year agreement allows users to create AI-generated videos featuring more than 200 characters from Disney, Marvel, Pixar, and Star Wars franchises.

Under the deal, Disney will also become a major customer of OpenAI, using its APIs to build new products and experiences for Disney+ and deploying ChatGPT for its employees.

The agreement includes warrants for Disney to purchase additional equity in OpenAI beyond the initial $1 billion investment.

Robert A. Iger, CEO of The Walt Disney Company, stated in the official announcement: "Technological innovation has continually shaped the evolution of entertainment, bringing with it new ways to create and share great stories with the world.

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."

Sam Altman, co-founder and CEO of OpenAI, said: "Disney is the global gold standard for storytelling, and we're excited to partner to allow Sora and ChatGPT Images to expand the way people create and experience great content.

This agreement shows how AI companies and creative leaders can work together responsibly to promote innovation that benefits society, respect the importance of creativity, and help works reach vast new audiences."

Disney sends cease-and-desist to Google over AI infringement

On the same day Disney announced its OpenAI partnership, the company sent a cease-and-desist letter to Google, accusing the tech giant of copyright infringement on a "massive scale."

According to the letter reviewed by multiple news outlets, Disney claims Google has been using its copyrighted works to train AI models and distribute unauthorized content without compensation.

The letter alleges that Google's AI services infringe on characters from Disney properties, including Frozen, The Lion King, Moana, The Little Mermaid, Deadpool, Guardians of the Galaxy, Toy Story, and Star Wars franchises.

Disney's attorneys demanded that Google immediately cease copying, displaying, and distributing Disney's copyrighted characters through its AI services, including YouTube's mobile app and Google Workspace applications.

Speaking to CNBC, Iger explained the decision to send the letter: "We had been in discussions with Google basically expressing our concerns. And ultimately, because we didn't really make any progress, the conversations didn't bear fruit, we felt we had no choice but to send them a cease-and-desist."

Google responded with a statement: "We have a longstanding and mutually beneficial relationship with Disney, and will continue to engage with them.

More generally, we use public data from the open web to build our AI and have built additional innovative copyright controls like Google-extended and Content ID for YouTube, which give sites and copyright holders control over their content."

Following the cease-and-desist letter, Google removed dozens of AI-generated videos featuring Disney characters from its platforms.

Child safety groups criticize the partnership

The Disney-OpenAI deal has drawn criticism from child safety advocates. Fairplay, a non-profit organization dedicated to reducing children's screen time, issued a statement condemning the agreement.

Josh Golin, executive director of Fairplay, 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."

In response to safety concerns, both companies have emphasized their commitment to responsible AI use.

The joint statement from Disney and OpenAI affirms they will maintain "robust controls to prevent the generation of illegal or harmful content" and protect the rights of creators.

Deal structure and industry implications

According to Bloomberg, the licensing agreement between Disney and OpenAI is structured entirely through stock warrants rather than cash licensing fees.

The deal is exclusive for the first year, with TechCrunch reporting that after this initial period, the arrangement becomes non-exclusive.

The agreement notably excludes any talent likenesses or voices, meaning AI-generated videos can feature characters like Woody from Toy Story but without the voice of actor Tom Hanks.

Users will be able to access Disney characters through Sora and ChatGPT Images starting in 2026, with curated selections of fan-generated videos appearing on Disney+.

Disney has been actively pursuing legal action against other AI companies. Earlier in 2025, Disney joined NBCUniversal and Warner Bros.

Discovery in suing AI image generator Midjourney for alleged copyright violations. The company also sent cease-and-desist letters to Meta and Character.AI regarding unauthorized use of its intellectual property.

The OpenAI partnership represents a significant shift in Hollywood's approach to generative AI, with Disney positioning itself to control how its intellectual property is used in AI applications while potentially generating new revenue streams.

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