• by Wayne Friedman , 5 hours ago

Jumping into artificial intelligence (AI) in a big way, Walt Disney is investing $1 billion in OpenAI in a deal that would allow fans and consumers to create short-form video of some 200 Disney characters from its Marvel, Pixar and “Star Wars” content.

The deal is part of a three-year licensing agreement with OpenAI’s Sora platform -- where users can type what they want to see, and Sora produces a short-form video which can then be viewed, shared and distributed on social media.

OpenAI’s Sora is a text-to-video AI system that creates real-looking “stylized” videos.

Hollywood studios’ AI efforts are controversial -- with executives and analysts concerned over future employment of actors, writers, and other key business when it comes to creation of TV shows and movies.

Major talent agencies have heavily criticized the potential of Sora to cause major damage to the Hollywood ecosystem.

Addressing concerns of the creative community, Disney CEO Bob Iger said on CNBC that the deal is only for the images. The voices of performers and characters -- or “name and likeness” -- will not be part of the deal.

“This does not represent a threat to the creators at all,” says Iger: “It gives us an opportunity to play a part in what is really a breath-taking growth in essentially AI and new forms of media entertainment.”

In addition, he says, some of the users created Sora-based content will be “curated” and put on Disney+, the company’s large premium streaming platform.

In a statement, as part of its announcement, Disney said: “Under the agreement, Disney and OpenAI are affirming a shared commitment to the responsible use of AI that protects user safety and the rights of creators. Together, the companies will advance human-centered AI that respects the creative industries and expands what is possible for storytelling.”

The announcement says video images from Sora and ChatGPT -- OpenAI's first AI platform, launched in November 2022 -- are expected to start with Disney’s licensed characters in early 2026.

In mid-day Thursday trading, Disney’s stock was up 2% to $110.65.