Bob Iger just left his Disney successor a disaster in the making
Bob Iger doesn’t understand generative AI.
He thinks it is good for the quarterly bottom line. He believes a corporation can control it, and that lawyers and agreements can bind it. He is clueless. Generative AI is here to kill Hollywood—including the company he’s now leaving to Josh D’Amaro, the new heir to Disney’s throne.
This became painfully clear to me during Disney’s recent first-quarter financial call. Taking a victory lap for his “modernization” efforts, he briefly laid out the roadmap for the company’s partnership with OpenAI, announced in December 2025. Under the agreement, Disney would invest $1 billion in the AI company and let it tap Disney’s IP crown jewels so Sora users can make clips of Donald Trump wearing an Iron Man suit battling Jafar dressed as an Iranian Ayatollah.
Here’s Iger’s plan as stated: Step one—flood Disney+ with Sora 2 generated “vertical videos” capped at 30 seconds. Iger views this as a “positive step” that will “jump-start” the platform’s ability to compete with the dopamine-loop short-form content of TikTok and YouTube.
There is no Step 2. At least not yet.
For the last 15 years, Iger has been on a quest to find the silver bullet that keeps Disney relevant deep into the 21st century. He bought Pixar, Marvel, Star Wars, and Fox. Now, as he leaves Cinderella’s castle behind, he clearly views this Sora partnership as the final move that allows him to leave the company “future-proofed.”
During the call, Iger all but carved this philosophy in stone for D’Amaro. “I believe that in the world that changes as much as it does that in some form or another, trying to preserve the status quo is a mistake, and I’m certain that my successor will not do that,” Iger said. “They’ll be handed, I think, a good hand in terms of the strength of the company, [and a] number of opportunities to grow.”
But to say curated AI slop provides “a number of opportunities to grow” is an Epcot-sized ball of naiveté. Iger’s intention to evolve Disney is correct; stagnation is indeed death, as any Harvard Business School freshman will recite. But his strategy fails to understand the nature of the beast he has invited into the Magic Kingdom.
Iger is talking about generative AI like a new distribution channel or a camera lens—a tool that can be kept in a walled garden to serve a corporate master. But AI is not a tool; it is a solvent. It dissolves the barriers between creator and consumer, between professional and amateur, and ultimately, between value and noise.
A new plan for Disney
D’Amaro is walking into a wall of noise that is going to get increasingly harder to break through as generative content continues to take over our feeds. Disney’s saving grace could be that D’Amaro, a man who built his career overseeing the company’s theme parks and experiences, likely understands the value of true physical, human-driven innovation. Expanding those experiences, as Iger said on the call, will be Disney’s focus in the years to come.
It makes perfect sense. Disney’s Experiences segment outperformed the Entertainment segment in Q1 2026 by a factor of almost three. While entertainment revenue reached $11.61 billion, high content production and marketing costs for major releases caused its operating income to plunge 35% to $1.1 billion.
In contrast, the Experiences segment posted record revenue of $10.01 billion with an operating income of $3.31 billion, accounting for roughly 71% of Disney’s total segment operating profit for the quarter. It’s telling that the physical experience and its human factor, beat the cumulus of film and TV re-fried franchise releases.
D’Amaro has the opportunity to set a strategy that could make Disney thrive. He has the track record to do it. D’Amaro’s experience isn’t limited to running a theme park. He secured the throne partly because he championed Disney’s $1.5 billion investment in Epic Games and Fortnite. He seemingly understands the digital generation. Now the question is, will he see the Sora deal for what it is?
Disney’s agreement with OpenAI is a three-year deal, with a one-year exclusivity clause that opens Disney to close deals with, say, Kuaishou Technology, the Chinese makers of Kling. In corporate time, three years is a blink. But for Generative AI—where time is measured in yellow dog’s years—it is an epoch.
By the time this contract expires, the havoc AI will have wreaked on the entertainment industry won’t be something you can negotiate away. This is a pivotal moment that D’Amaro needs to address now, even if it goes against the stock market algorithms and the vision of a Wall Street-revered old man now sailing into the sunset on his gilded version of the Black Pearl.
Iger’s AI strategy
Iger outlined three pillars for this AI strategy at his call:
- Creativity (assisting the process)
- Productivity (efficiency, read: cost-cutting)
- Connectivity (a “more intimate relationship” with the consumer).
His vision is a Disney+ where you don’t just watch Frozen; you generate a 30-second clip of Olaf dancing in your living room. Exciting.
The financial sector, predictable as ever, applauded at the mere thought of Disney embracing AI. When the Sora deal was announced, many analysts like Citi Research Media Analyst Jason Bazinet called this a masterful move: A “strategic defense,” and a way to monetize IP that would otherwise be scrapped for free. Bazinet believes “this agreement codifies what specific IP can be used (animated characters) and what form the output can take (i.e. short-form video). This will both protect actors/actresses in Hollywood and prevent cannibalization of Disney’s long-form Film and TV output.”
Outside the boardroom, things aren’t so La La Land. The unions that work in the “Creativity” pillar view Iger’s AI strategy as a betrayal, framing it as a Trojan Horse that normalizes the technology that is intended to replace them. The Writers Guild of America said that “[the partnership] seems to endorse the platform’s appropriation of their work while diminishing the value of their creations for the benefit of a tech corporation.”
Iger’s idea of “Productivity” is just corporate speak for employing fewer humans. “Jobs are going to be lost,” as filmmaker Tyler Perry said after the news. Perry saw the writing on the wall a long time ago, halting an $800 million studio expansion after seeing the first version of Sora. If you can generate a location, you don’t need to build it. If you can generate a performance, you don’t need to film it. Disney has been cutting jobs in the film, television, and finance department, but none related yet to its AI initiatives, mainly in post-production..
And as for “Connectivity,” consumers are all well served, thank you very much. Anyone who has surfed YouTube, TikTok, Discord, Instagram, X, or Reddit, knows they are overflowing with AI-generated videos. There are not enough Avengers, Baby Yodas, and Mickey Mice in the world to win this war of content. And the more time that passes, the less chance Disney has at winning that war with the same tools as the “enemy” is using.
Disney is adopting Sora to fight a battle in its own walled garden, limited to its famous-but-limited IP. By definition, it can’t compete against the entire planet creating universes of infinitely-expanding generated content.
Horizon events
Iger seems to believe that by partnering with OpenAI, Disney has bought safety. Somehow, he thinks this buys Disney control over the beast. But OpenAI does not control generative AI. Altman is a chump compared to the combined power of the companies cooking generative AI video technology in China. Generative AI is, right now, an all-powerful being who doesn’t care about corporate deals.
Iger’s remarks remind me of that viral 1999 Newsnight interview with David Bowie, where he laughed at the interviewer who thought the Internet was “just a tool.” No Bob, Bowie would have told Iger today, AI is not a tool. It’s an alien lifeform.
Experts warned me of this moment in 2023. Tom Graham—CEO of Metaphysic, a firm dedicated to protecting actors and regular people against AI clones— told me that we were approaching a “horizon of events” where reality would evaporate. Gil Perry—CEO of AI avatar firm D-ID—predicted that within “one or two years,” we wouldn’t be able to distinguish truth from lies. Emad Mostaque—co-founder of Stability AI—told me that within a decade, we’d create anything in real-time with “visual perfection.”
They were all correct, but far too conservative. We didn’t need a decade. We barely needed three years. Which, in itself, is a testimony of the true power of AI and its ability to change reality and content as we know it.
Today, early 2026, we have crossed that horizon. The “uncanny valley,” which allowed us to instinctively distinguish fake AI from real, is permanently closed. Models like Sora 2 and Google’s Veo 3 more than often produce video indistinguishable from reality for short clips. But the real threat to Disney isn’t the partner they paid $1 billion to; it’s the technology they didn’t buy.
Open-source platforms like Wan 2.6—made by Chinese company Alibaba—are already running on consumer hardware, offering “multi-shot storytelling” and character consistency that rivals the closed systems of Silicon Valley. The technology is wild, uncensored, and free. It doesn’t care about Disney’s copyright. It doesn’t care about walled gardens. It is creating a Big Bang of content where a teenager in a basement can generate a film that looks as expensive as a Marvel blockbuster.
The dilution of magic
And this is where Iger’s gamble truly falls apart. He assumes that in this world of infinite, picture-perfect content, Disney’s IP will remain king. And why? Disney has spent the last decade systematically exhausting its brand equity. We are drowning in the umpteenth Star Wars spinoff and the 50th Marvel phase. The brand fatigue is palpable. Why would people, except the hard-core fanboys, choose to consume frozen-TV-dinner clips of the same old stuff again and again?
How can the acceleration of this IPs’ exhaustion, allowing users to churn out “AI-slopped” versions of these characters, help Disney? Iger thinks adding “curated” user-generated noise to Disney+ is a value-add, failing to see it for what it is: the final commoditization of its former magic.
Why would the current and future generations care about a sanitized, 30-second Mickey Mouse clip on Disney+ when they can go to an open platform and generate their own universe, tailored specifically to their own desires, with characters that feel just as real but are completely new?
Change course or sink
If there’s anything I can be sure of is that the history of the internet—from YouTube to TikTok—teaches us one thing: The audience craves the new, the raw, and the personal. They are moving away from the polished, corporate monoliths. By integrating Sora 2, Iger isn’t saving Disney; he is training his audience to accept synthetic media, accelerating the very shift that renders legacy studios obsolete. Bob Iger is right that you have to change or die. But by betting that he can ride the tiger of generative AI without being eaten, he may have just opened the cage door for good.
Perhaps D’Amaro, the man of the physical Disney, can save the House of Mouse from the digital trap Iger has set for him. If the future of content is infinite, cheap, and synthetic, the only true luxury left is the human touch. D’Amaro has the chance to zag where the rest of the industry is zigging. He can double down on the one thing AI cannot simulate—the spark of human genius that birthed this company in the first place.
Instead of competing with teenagers in garages on AI speed, hire them to do what Walt Disney himself did: Invent new mythologies. Create your own technologies. Craft truly new, bold stories born from the messiness of the human spirit, not the probability curves of a model trained on the past. Reclaim the “experience” not just as a theme park ride, but as the act of witnessing something undeniably, beautifully human.
That is the only magic trick left that an algorithm can’t replicate.