Death Of Disney’s OpenAI Deal Exposes Hollywood’s Vulnerability To The Capriciousness Of Big Tech

The old Silicon Valley cliche, coined by Mark Zuckerberg, is that you move fast and break things. OpenAI sure did that with Sora. In six short months, Sora 2 broke the internet with its startling virality. It broke copyright protections. And now, the app is just broken after Sam Altman’s tech titan dramatically beat a retreat from generative video.

Along the way, OpenAI did try to fix at least one thing: Its relationship with Hollywood. The company signed a groundbreaking $1B deal with Disney, which smoothed out content theft disputes by allowing Sora access to the Mouse House’s iconic characters, including those from Frozen and Beauty and the Beast. But now even that’s broken.

“The deal is not moving forward,” a Disney insider bluntly told my colleague Dominic Patten. So, one of the final acts of Bob Iger’s tenure is dead on arrival, leaving new CEO Josh D’Amaro to pick up the pieces. In a statement, Disney said it respected OpenAI’s decision (what choice did it have?) and learned from the “constructive collaboration,” even if it was short-lived.

The uncoupling raises practical questions. Does Disney get its investment back? And does the company intend to remain an OpenAI customer? Disney planned to use the company’s artificial intelligence to build new products, tools, and experiences, as well as officially deploying ChatGPT for its employees. It’s conceivable some of this work could be unwound.

Over and above the practicalities, the OpenAI deal was deeply symbolic. It was Disney’s way of saying: If you can’t beat them, join them. The logic appeared to be that, if AI behemoths are going to train their models on Disney IP without permission, the company might as well start profiting and learning from it.

At the same time, Disney told Google to get off its lawn, sending a cease and desist letter demanding that its AI products stop behaving like a “virtual vending machine” for Star Wars, Marvel, and other IP. Disney was committed to OpenAI, but it was telling Google: You’re either with us, or against us.

If these two positions firmed up Disney’s stance on generative AI, Sora’s brutal shuttering shakes the ground beneath the Mouse House’s feet. OpenAI represented a leap of faith, an exercise in trust. It’s hard to escape the feeling that Disney’s trust has been trashed. In its statement on Tuesday, Disney said it plans to “engage” with other AI platforms, but it would be a surprise if it rushed into another major deal after getting its fingers burned.

And that’s a shame — not just for Disney, but potentially the whole of Hollywood. The OpenAI partnership was a template on which to build, potentially allowing for other deals that end the exploitation of human creativity by unscrupulous AI models. It was also the kind of partnership that was palatable for the Human Artistry Campaign and Creators Coalition on AI, lobby groups that have been critical of tech business models and command support from A-listers, including Scarlett Johansson, Cate Blanchett, and Joseph Gordon-Levitt.

Dr. Moiya McTier, an advisor to the Human Artistry Campaign, puts it this way: Part of the problem is getting “artsy people and the techie people to talk.” OpenAI sinking Sora will not make these discussions easier. It’s a move that starkly exposes Hollywood’s vulnerability to the capriciousness of big tech.