Lawsuits or billion-dollar deals: How Disney picks its AI copyright battles

• Disney's IP is under siege by the AI industry's 'ask for forgiveness, not permission' culture.
• Disney sent a cease-and-desist to ByteDance, saying it 'hijacked' its characters with Seedance 2.0.
• When OpenAI's Sora was used to create Disney characters, however, the House of Mouse struck a deal.

No, Disney did not release footage of a never-before-seen fight sequence between Marvel's Wolverine and Thanos (spoiler: Thanos won).

That clip, which amassed over 142,000 views on X over 48 hours, was created using Seedance 2.0, an AI video generation model that ByteDance debuted last week. The tool created a buzz on social media, where one user made a hyperrealistic AI video of Tom Cruise and Brad Pitt fighting over Jeffrey Epstein.

ByteDance's decision to let users create content based on Disney's IP without permission isn't all that surprising given the AI industry's well-established strategy to "ask for forgiveness, not permission."

Disney, which is infamous for aggressively protecting its intellectual property, isn't having it — though how it responds to the threats is not always the same.

On Friday, the entertainment company sent ByteDance, the Chinese company that owns Seedance and TikTok, a cease-and-desist letter, a spokesperson confirmed to Business Insider.

In the letter, Disney accused ByteDance of supplying Seedance 2.0 with "a pirated library of Disney's copyrighted characters from Star Wars, Marvel, and other Disney franchises, as if Disney's coveted intellectual property were free public domain clip art."

"Over Disney's well-publicized objections, ByteDance is hijacking Disney's characters by reproducing, distributing, and creating derivative works featuring those characters," the letter said.

Seedance is only the latest AI company Disney says is ripping it off.

Disney and NBCUniversal sued Midjourney, an AI image generator, in June last year. In the lawsuit, the companies compared Midjourney's tech to "a virtual vending machine, generating endless unauthorized copies of Disney's and Universal's copyrighted works."

Then Disney accused Character.AI of copyright infringement in a September cease-and-desist letter last September. In December, it sent one to Google in response to the AI image generator Nano Banana Pro and its other AI models, accusing the Big Tech giant of stealing its IP on a "massive scale." Both companies have since removed Disney characters from their platforms.

Disney is not anti-AI, however, and its strategy is not one-size-fits-all. The company took a much less adversarial approach with OpenAI, the world's leading AI startup.

When OpenAI debuted Sora 2, an AI-powered text-to-video platform, in September, users began uploading IP-heavy content featuring Disney characters to social media. Instead of a cease-and-desist letter or legal action, though, Disney negotiated a deal.

By December, Disney and OpenAI had announced a three-year licensing agreement that gives Sora users, with some guardrails, access to 200 Disney characters. As part of the deal, Disney would also invest $1 billion in OpenAI.

Although Disney hasn't shared plans to develop its own AI model or video generator, Disney CEO Bob Iger said the company ultimately sees the tech not as a threat but as a new path to connect with audiences.

During an earnings call late last year, he said AI would "provide users of Disney+ with a much more engaged experience, including the ability for them to create user-generated content, and to consume user-generated content, mostly short form, from others."