""AI companies are either in a position where they need to aggressively filter user prompts and model outputs to make sure that they don't accidentally show Darth Vader, or strike deals with the rights holders to get permission to make videos and images of Darth Vader," Sag told Fortune. "The licensing strategy is much more of a win-win.""
""OpenAI hasn't figured out the revenue model," Sag said. "So I think making this just an investment deal, in some ways, simplifies it. For Disney ... [OpenAI] will figure out a way to make this profitable at some point, and [Disney will] get a cut of that.""
"For more than a year, the biggest legal threat to large-scale generative AI has centered on what Sag calls the "Snoopy problem": It is extremely difficult to train powerful generative models without some degree of memorization, and copyrightable characters are uniquely vulnerable because copyright protects them in the abstract."
Disney committed $1 billion to OpenAI and granted rights for more than 200 Disney, Pixar, Marvel, and Star Wars characters to appear in OpenAI's Sora video generator and ChatGPT Image. The three-year agreement includes equity warrants, positions Disney as a significant OpenAI customer, and enables internal deployment of ChatGPT. The arrangement operates as a form of revenue-sharing and grants explicit permission to produce character outputs rather than licensing training data. Licensing outputs offers an alternative to aggressive prompt and output filtering and aims to mitigate memorization risks to copyrightable characters described as the "Snoopy problem."
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