Disney + OpenAI: Explained

A DREAM IS PROMPT YOUR AI MAKES

Happy Weekend Peaceniks. Let’s UGC!

Here’s the actual cheese behind the The Walt Disney Company + OpenAI deal (as far as we know):

🐭 Disney makes a $1 billion investment in #OpenAI.

🐭 Disney “licenses” approximately 200 characters to OpenAI for use in Sora (CHARACTERS ONLY, NOT VOICES).

🐭 Disney has mentioned Marvel, Pixar, “classic” animation (everything from Princesses to Lion King), and Star Wars IP as included in the deal.

🐭 OpenAI and #Disney (but let’s be honest this is about Altman) “affirm a shared commitment to the RESPONSIBLE use of AI that PROTECTS user safety AND THE RIGHTS OF CREATORS” and “maintains ROBUST CONTROLS.”

🐭 “SELECT fan-inspired Sora short form videos WILL BE MADE AVAILABLE TO STREAM ON DISNEY+” (select does a lot of lifting in this sentence).

🐭 “Disney Licenses” also does A LOT of work in these press announcements.

🐭 As part of the deal, “Disney will become a major customer of OpenAI, with access to their APIs to build new products, tools, and experiences, and deploying ChatGPT for its employees.”

MY TAKE:

🐭 While this deal focuses on landmark technology, this is an OLD SCHOOL Hollywood “ROUND-TRIP” money deal - the cheese leaves Disney, but then boomerangs right back.

🐭 Disney gets 0.2% of OpenAI - but they likely are getting it at the $500b valuation, BEFORE OpenAI goes public next year, at a market cap of more than $1 TRILLION.

🐭 There is NO DOUBT that Disney is getting a rich license fee for usage of their IP. This deal was negotiated by Iger. THAT is how we know.

🐭 Disney likely gets a sweetheart deal for OpenAI tools. My guess, based on the careful wording of their press releases, is that Mouse House gets ChatGPT in exchange for the investment and escalating freemium rights to the more complex tools, with fees based on specific, ongoing usage.

🐭 Disney gets OpenAI to serve as their outsourced “slopkeeper,” protecting their IP from abuse, and helping them monetize all IP usage (slopkeeper coined by Jeff Rivera).

🐭 Disney knows that AI is the new search and plans on partnering with OpenAI to make AI and agentic recommendations in ChatGPT and Sora for theme parks, merch, subscriptions, and movie tickets.

🐭 If you look back on “Ratatousical,” a user generated TikTok musical based on Disney’s Ratatouille, by the time Disney became aware of it, it was too late to kill it, so they let it happen.

🐭 THIS DEAL IS MEANT TO GET OUT AHEAD OF THAT IN AI: giving Disney “rights” to UG AI shorts for Disney+ (btw search for the musical bc it’s great).

🐭 This not only protects Disney’s IP rights, it AUTOMATICALLY and IMMEDIATELY provides Disney “ownership” of derivative work based on their IP created on Sora, WITHOUT having to chase it or sue people for it.

🐭 And THAT, dear friends, is perhaps THE MOST groundbreaking part of this deal.

IT’S AI SMALL WORLD AFTER ALL!

Enjoy your weekend!

ESHAP