The Disney-OpenAI tie-up has huge implications for intellectual property

Walt Disney and OpenAI make for very odd bedfellows: The former is one of the most-recognized brands among children under the age of 18. The near-$200 billion company’s value has been derived from more than a century of aggressive safeguarding of its intellectual property and keeping the magic alive among innocent children.

OpenAI, which celebrated its first decade of existence this week, is best known for upending creativity, the economy, and society with its flagship product, ChatGPT. And in the last two months, it has said it wants to get to a place where its adult users can use its tech to create erotica.

So what the hell should we make of a just-announced deal between the two that will allow ChatGPT and Sora users to create images and videos of more than 200 characters, from Mickey and Minnie Mouse to the Mandalorian, starting from early 2026?

Terms of the deal

As part of the three-year agreement, OpenAI has committed to continuing to implement robust trust and safety measures, as well as controls to stop illegal or harmful content. Disney hopes that means you can’t make lewd footage of Belle and the Beast—but given the precarity of AI-model guardrails, and the ease with which they can be jailbroken, there’s no guarantee.

That’s what makes the deal so puzzling for Disney, an externally benign behemoth that has long acted like an attack dog in defending unauthorized use of its intellectual property. 

“Some Disney fans and content creators will undoubtedly celebrate the news and the opportunity to play in the Company’s sandbox in a more official way,” says Rebecca Williams, a researcher who studies Disney and its business at the University of South Wales. “But there are clear questions over copyright here.”

Among them is how much influence Disney—infamously controlling over how its characters are depicted—will have over the 800 million ChatGPT users’ creations. Although the deal reportedly will result in the creation of a joint steering committee to dictate the use of IP, this is a company that has previously sued providers of costumed characters for child birthday parties for unauthorized use of its IP. 

And as it brokered its deal with OpenAI, lawyers for Disney sent a letter to Google alleging copyright infringement on a “massive scale.” (Google did not immediately respond to Fast Company’s request for comment on the claims.) “Disney is famously an IP defender and very aggressive,” says Carissa Véliz, an AI ethicist at the University of Oxford, “and OpenAI just throws it out the window.”

Character control

There’s also a big shift in how Disney is ceding control of how its characters are depicted—not least given Sam Altman’s statement this fall that he wants to give verified adult users of OpenAI tools the ability to engage in erotic interactions, and, more generally, to loosen restrictions on OpenAI’s tools. 

“Disney’s statement frames this very much as giving fans control, offering them more creativity, and greater opportunities to connect with Disney characters and stories,” says Williams. “It remains to be seen whether this is what fans actually want”

The deal also requires a shift for OpenAI, too. Presumably, that approach to slackening controls for users across OpenAI apps and services to be more permissive in what they can say, do, and create using the firm’s technology will have to be tightened more when talking about Disney properties.

Alongside letting Disney fans create their own AI versions of favorite characters, the House of Mouse is also leaping headlong into the AI space: As part of the agreement, Disney is investing $1 billion in equity into OpenAI and will reportedly become a “major customer” of the company.

A new frontier for copyright

The deal also alters both firms’ approach to copyright. All the talk between Bob Iger and Sam Altman about redefining the future of storytelling is bluster, reckons Adam Eisgrau, senior director for AI, creativity and copyright policy at the Chamber of Progress, a tech trade group.

“The biggest story today is what they apparently also have agreed between the lines,” he says. That includes the idea that “there’s no future in content companies fighting fair use to sue generative AI developers for direct copyright infringement over training inputs,” and that generative AI developers want to cut more deals “to preclude secondary liability legal fights over their outputs.”

But more than anything else, the deal potentially changes the idea of what made Disney Disney, reckons Véliz.

“How is it going to affect creativity in the long run?” she asks. “The raison d’etre for IP is to incentivize creativity, and when we undermine it, we give talent fewer reasons to focus on being creative,” she explains. “It’s very ironic that a company like Disney, known for valuing talent, for valuing creativity, for valuing craftsmanship, is making a deal with a company that arguably represents the opposite of that.”