Disney, the century-old entertainment powerhouse, has thrown open the gates to a new era of creativity by announcing a $1 billion licensing agreement with OpenAI on December 11, 2025. This partnership, which allows OpenAI’s Sora video model to use Disney’s iconic characters and franchises, signals a seismic shift in how Hollywood views artificial intelligence (AI)—and how fans might soon be interacting with their favorite stories.
According to Axios, Disney’s move makes it the first major content licensing partner on Sora, OpenAI’s cutting-edge video generation platform. The deal isn’t just about money; Disney will also make a $1 billion equity investment in OpenAI and receive warrants to buy additional equity, underscoring just how seriously the company is taking its leap into the AI age.
But what does this mean for the average Disney fan—or for the entertainment industry at large? For starters, Sora users will soon be able to generate short videos from user prompts, drawing on more than 200 of Disney’s beloved “animated, masked and creature characters,” as well as costumes, environments, props, and vehicles from the company’s vast vault. ChatGPT Images will also let users create still images using the same intellectual property, Axios reports.
Disney’s CEO Bob Iger summed up the company’s excitement, stating, “This collaboration puts imagination and creativity directly into the hands of Disney fans in ways we’ve never seen before.” Curated selections of Sora-generated videos will even be available on Disney+, giving fan creations the chance to reach a global audience.
Yet, Disney’s embrace of AI comes with carefully drawn lines. The agreement does not extend to the voices and likenesses of Disney talent, a crucial distinction after recent controversies in the industry. After actor Bryan Cranston’s voice and likeness were replicated without his consent earlier this year, OpenAI was prompted to strengthen guardrails around such replication. The labor union SAG-AFTRA, which represents performers, said in a statement that it “will closely monitor the deal and its implementation to ensure compliance with our contracts and with applicable laws protecting image, voice, and likeness.” Both Disney and OpenAI have assured the union that they “will meet their contractual and legal obligations to performers and continue to implement systems to ensure ethical and responsible use of this technology,” according to Axios.
To further protect its brand and its creators, Disney and OpenAI have established a joint steering committee to monitor user-generated content. This committee is tasked with ensuring that no content violates a comprehensive brand appendix—essentially a rulebook outlining scenarios Disney wants to avoid. OpenAI has also committed to maintaining robust controls to prevent harmful or illegal content from being generated, and to implementing age-appropriate policies.
So, which characters are up for grabs? The list is a who’s who of Disney royalty: Mickey and Minnie Mouse, Lilo and Stitch, princesses like Ariel, Belle (and her Beast), and Cinderella, plus characters from “The Lion King,” “Big Hero 6,” “Encanto,” “Frozen,” and “Inside Out.” And that’s just the start. Animated versions of Marvel and Star Wars icons—including Black Panther, Captain America, Han Solo, and Luke Skywalker—are also part of the deal, Axios confirms.
Fans won’t have to wait long to get creative. Disney and OpenAI expect Sora and ChatGPT Images to start generating content with Disney’s licensed characters early next year, according to press releases from both companies.
For Disney, this isn’t just about keeping up with the times; it’s about setting the pace. As Ark Invest analyst Nicholas Grous told Fortune, the deal marks a dividing line in entertainment history—between “pre-AI” and “post-AI” content. Grous argues that Disney’s real advantage is the depth of its pre-AI catalog, with franchises like Star Wars and classic princess films now serving as raw material for a global experiment in AI-assisted storytelling.
Grous likens this moment to the dawn of YouTube, when professional-grade video creation became accessible to anyone with a camera. Now, thanks to Sora, anyone with a prompt can create something new with Disney’s characters. “I think you’re going to have basically a split between pre-AI content and post-AI content,” Grous told Fortune, suggesting that audiences may soon attach a premium to work made largely by humans before generative tools became commonplace. “Pre-AI content… actually becomes incrementally more valuable to the entertainment landscape.”
But the implications go deeper. Disney can now monitor which AI-generated character combinations or storylines resonate online and selectively “pull up” the most promising ideas for professional development—be it for Disney+ or theatrical release. “We didn’t know Cinderella walking down Broadway and interacting with these types of characters, whatever it may be, was something that our audience would be interested in,” Grous explained. This feedback loop could transform how new stories are tested and developed, with fans effectively serving as a global focus group.
Disney’s approach could become a template for other legacy media owners looking to survive—and thrive—in an AI-saturated market. The value of intellectual property (IP) is skyrocketing, as seen in the $100 billion-plus bidding war between Netflix and Paramount for Warner Bros. content. Whoever controls the most beloved franchises will likely have the upper hand in the coming wave of AI-generated entertainment.
Of course, Disney’s embrace of AI comes after years of legal skirmishes over the use of its copyrighted characters. Just this week, Disney sent a cease-and-desist letter to Google, accusing the tech giant of using its works to train generative AI models without permission. Previous letters have targeted Character.AI and other firms, with Disney making it clear: “Disney will not allow your company to hijack its characters, damage its brands, or infringe its copyrights and/or trademarks.” The company has also joined forces with NBCUniversal and Warner Bros. Discovery in lawsuits against other AI companies, Axios reports.
Yet amid all the excitement, there are notes of caution. Grous, for one, warned that a backlash could be brewing against AI-generated content. As he told Fortune, “The binge-watch won’t feel as good anymore, and there will be some kind of backlash.” He even suggested that the endangered movie theater might make a comeback, as people seek out more authentic entertainment experiences. “People are going to want to go outside and meet or go to the theater. Like, we’re not just going to want to be fed AI slop for 16 hours a day.”
As Disney steps boldly into this new era, the entertainment world is watching closely. The company’s willingness to experiment with new tools while fiercely protecting its creative legacy could well determine how stories are told—and who gets to tell them—in the age of AI.
