Disney will license its stable of characters in a three-year licensing deal that will enable Sora users to create social videos.
Terms of the agreement include:
- Sora will have access to more than 200 Disney, Marvel, Pixar and Star Wars characters.
- Sora users can create videos that will be available to stream on Disney+.
- Disney will use OpenAI models throughout its enterprise and become a major customer. Disney employees will use ChatGPT.
- OpenAI APIs will be used to build new products.
- Disney will invest $1 billion in OpenAI and have warrants to buy more shares.
On its own, the OpenAI-Disney partnership is standard issue. However, Disney is opening the door for other media companies to license IP and characters to models. After this deal, it's not a stretch to see Google Gemini do something similar. This OpenAI-Disney deal is the equivalent of putting Mickey Mouse on the Apple Watch.
Short term, media giants will license IP to AI players just like they do streaming companies like Netflix.
But the real thing to watch is whether media companies use LLMs to leverage their own IP. Media companies have historically been behind on new technology and AI isn't much different.
Here's what media companies should be doing:
- Develop their own models powered by their own data just like enterprises do.
- Create new experiences so customers can spin up their own episodes. The Simpsons may be the best training set ever for a model. Why not be able to spin up my own Bart adventure? AI can monetize vast libraries of content.
- With an AI-driven approach, there's no reason why media companies couldn't create what essentially is the next streaming market.
- Given that backdrop it's not surprising that Netflix and Paramount Skyworks are dueling to buy Warner Bros. Discovery. Rest assured the Ellison family, which controls Paramount Skydance, knows where this game is going. We're at the IP and data gathering phase of this game. The media company with the best first party data (characters, franchises and audience) can win the AI era.
At a panel at AWS re:Invent 2025, Albert Cheng, VP of AI for Prime Video, said AI is becoming the next streaming moment. Cheng said:
"I feel the same way today about AI as I did when I first started pushing streaming at Disney. It's the start of another transformation. Streaming transformed distribution and I think AI is going to transform the way content is created."
This mashup of AI and media is just starting. The deal between OpenAI and Disney is just the first volley.
