Disney bets $1 billion on OpenAI in deal that opens its vault of characters to ChatGPT and Sora

• Disney and OpenAI struck a licensing agreement that gives ChatGPT and Sora access to Disney's characters and IP.
• Disney is also investing $1 billion in the AI company and becoming a "major customer."
• The deal means you'll soon see officially sanctioned AI images and videos of Disney characters.

Darth Vader is coming to ChatGPT and OpenAI's Sora AI video app.

The House of Mouse and OpenAI struck a three-year licensing agreement on Thursday to make Disney "the first major content licensing partner on Sora."

It's also investing $1 billion into the AI pioneer and receiving warrants to purchase additional equity.

Shares of Disney jumped .6% in premarket trading and climbed over 2% after the opening bell.

"As part of this new, three-year licensing agreement, Sora will be able to generate short, user-prompted social videos that can be viewed and shared by fans, drawing from a set of more than 200 animated, masked and creature characters from Disney, Marvel, Pixar and Star Wars, including costumes, props, vehicles, and iconic environments," OpenAI said in a Thursday announcement.

In addition to striking a licensing deal, Disney is also becoming a "major customer" of the AI company, according to the announcement, and buying ChatGPT enterprise licenses for its employees.

While Sora, OpenAI's TikTok-like AI video app, has been generating buzz and downloads since its launch earlier this year, users of the company's more popular product, ChatGPT, will also have access to AI versions of Disney's characters as part of the deal.

The companies stated that "the agreement does not include any talent likenesses or voices."

Disney CEO Bob Iger hinted at such a transaction during the company's most recent earnings call, making extensive comments about the potential he sees for AI to enhance Disney's direct-to-consumer strategy. He said the company was having extensive talks with AI companies to protect its IP as well as generate more engagement with users.

His comments demonstrate how Disney — like other Hollywood players — is looking for new ways for people to interact with its platforms and brands as user-generated content platforms and independent creators gain popularity.

Disney, like those other players, has an engagement problem. The time people spend on streaming has stayed essentially flat over the past few years, despite increased spending on content, while YouTube has grown. The bet with AI is that it can get people to spend more time on its platforms by giving them more ways to play around with its famous franchises.

The companies hinted as much in the announcement, saying that they would "collaborate to utilize OpenAI's models to power new experiences for Disney + subscribers."

Disney is also wary of the tech's risk to its IP. In June, Disney, along with Comcast's NBCUniversal studio business, sued AI company Midjourney, claiming its tech created unauthorized copies of works ranging from Star Wars to The Simpsons. Midjourney denied the claims in its legal response. The suit is ongoing.