AI: Disney vs Google/YouTube & Disney + OpenAI. RTZ #933
The ongoing tussles and kerfuffles between LLM AI companies and content/copyright owners saw some notable developments today. With OpenAI and Disney signing an investment plus content sharing deal on the one hand. A deal with wariness on both sides and three years in its making.
And Disney sending a ‘cease and desist’ notice to Google on the other hand, as discussed below. This is all part of the ongoing litigation/negotiations I’ve long–discussed in these pages. All in the ‘Show me the Money’ phase of the AI Tech Wave .
First, let’s look at the Disney/Google action, as Variety explains in “Disney Accuses Google of Using AI to Engage in Copyright Infringement on ‘Massive Scale’”:
“Disney sends cease-and-desist letter to internet giant demanding it stop alleged infringement.”
“As Disney has gone into business with OpenAI, the Mouse House is accusing Google of copyright infringement on a “massive scale” using AI models and services to “commercially exploit and distribute” infringing images and videos.”
Important target at Google here of course is YouTube, the colassal, unique edge Google has in the AI game, as I’ve articulated in detail.
“On Wednesday evening, attorneys for Disney sent a cease-and-desist letter to Google, demanding that Google stop the alleged infringement in its AI systems.”
“Google is infringing Disney’s copyrights on a massive scale, by copying a large corpus of Disney’s copyrighted works without authorization to train and develop generative artificial intelligence (‘AI’) models and services, and by using AI models and services to commercially exploit and distribute copies of its protected works to consumers in violation of Disney’s copyrights,” reads the letter to Google’s general counsel from law firm Jenner & Block on behalf of Disney.”
“According to the letter, which Variety has reviewed, Disney alleges that Google’s AI systems and services infringe Disney characters including those from Frozen, the Lion King, Moana, the Little Mermaid, Deadpool, the Guardians of the Galaxy, and Star Wars. In its letter, Disney included examples of images it claims were generated by text prompts in Google’s AI apps, including of Darth Vader (pictured above).”
Google is just the latest in this series of actions by Disney.
“The allegations against Google follows cease-and-desist letters that Disney sent earlier to Meta and Character.AI, as well as litigation Disney filed together with NBCUniversal and Warner Bros. Discovery against AI companies Midjourney and Minimax alleging copyright infringement.”
“Bob Iger, Disney’s CEO, in an interview with CNBC Thursday, said, “Well, we’ve been aggressive at protecting our IP, and we’ve gone after other companies that have not honored our IP, not respected our IP, not valued it. And this is another example of us doing just that.”
And it’s clear this action is just another step in the ongoing negotiations with Google and the AI industry at large:
“Iger said Disney had been in discussions with Google “basically expressing our concerns” about its AI systems’ alleged infringement. “And ultimately, because we didn’t really make any progress, the conversations didn’t bear fruit, we felt we had no choice but to send them a cease-and-desist [letter].”
“Disney’s letter to Google demands that Google “immediately cease further copying, publicly displaying, publicly performing, distributing, and creating derivative works of Disney’s copyrighted characters” in “outputs of Google’s AI Services, including through YouTube’s mobile app, YouTube Shorts and YouTube.”
The letter went on to provide some specific examples of infringement:
“Disney alleged that Google promoted a recent viral trend involving the creation of images of “figurines,” citing this post on X by Alphabet and Google CEO Sundar Pichai. According to Disney, Google has even supplied its own Gemini AI prompt to encourage users to take part in this trend, which “can be used to quickly and easily generate images of figurines of Disney’s copyrighted characters,” the letter says.”
The piece goes on to show examples of alleged infringing images in Disney’s letter and other details.
On the other hand, Disney is not averse to leaning into AI, as its OpenAI Deal shows.
Axios summarizes it in “Walt Disney to invest $1 billion in OpenAI, license characters for Sora”:
“Walt Disney has reached an agreement with OpenAI that will make the company the first major content licensing partner on Sora, OpenAI’s social video platform.”
“Why it matters: It’s a huge endorsement of AI-created content from one of the biggest media companies in the world.”
As I’ve discussed before, Sora is a huge success for OpenAI, as was its text to image success before that with the ‘Ghibli’ image craze I wrote about earlier this year.
Disney is also leaning in with a billion dollar investment in OpenAI, thus declaring an initial preferred AI partner:
“Zoom in: As part of the agreement, Disney will make a $1 billion equity investment in OpenAI. It will also receive warrants to buy additional shares.”
“Under the arrangement, social videos can be generated from from a set of more than 200 animated, masked and creature characters from Disney, Marvel, Pixar and Star Wars. It also gives users the ability to use hundreds of additional Disney animated props, like lightsabers.”
“Users can use the visual images of the approved set of Disney characters and props to make stills or short-form videos designed to live in social media.”
“They can’t use any voices associated with those characters, or make any long-form videos with Disney’s intellectual property.”
The deal calls for careful safeguards and processes for OpenAI to follow, to balance content/copyright infringement with permitted AI capabilities around Disney content:
“Between the lines: As part of the agreement, OpenAI will commit to implementing responsible measures to further address trust and safety, “including age-appropriate policies and other reasonable controls across the service,” per a statement.”
“That provision is especially important to Disney, which has taken issue with how AI platforms used by children have weaponized the names and likenesses of its characters in the past.”
“Of note: The deal also gives Disney a fair amount of oversight and control over how its characters and intellectual property is being used.”
“OpenAI and Disney have created a joint steering committee to monitor user creations for any content that violates a voluminous brand appendix, which outlines use cases Disney wouldn’t want its characters to be associated with.”
And of course the deal is meant to set a template for Disney going forward with the industry at large:
“Zoom out: Disney hopes its agreement with OpenAI serves as a proof point to the tech industry that it’s open to equitable agreements with AI firms, so long as its rights and creators are protected, according to source familiar with its thinking.”
“It also sees the agreement as an opportunity to get creative.”
“The OpenAI deal, a source familiar with the agreement told Axios, give Disney a number of ownership rights over the content created using its characters on Sora. The company also has the ability to curate the best of the user-generated videos to put them on its Disney+ streaming platform.”
Again, the deal is part of the defense/offense game Disney is playing with AI for now, as AI goes mainstream into people’s homes and habits:
“The big picture: The company has taken a more aggressive stance in going after AI companies for copyright infringement in recent months.”
“On Wednesday, the firm sent a cease and desist letter to Google, alleging it is infringing Disney’s copyrights on a massive scale, sources told Axios.”
“In September, the company sent a cease and desist letter to Character.AI with similar allegations.”
“In June, the entertainment giant — alongside NBCUniversal — became the first major studio to sue a generative AI company when it filed a complaint against Midjourney. Warner Bros. Discovery sued Midjourney in early September.”
“Earlier this month, Disney teamed with NBCU and WBD to sue the Chinese AI firm MiniMax, alleging large-scale piracy of their respective studios’ copyrighted works.”
Finally, the Information provides some broader context on the financial aspects of the OpenAI/Disney deal in “OpenAI’s Mickey Mouse Deal”:
“Disney’s licensing compensation will be via the grant of equity warrants, at OpenAI’s latest valuation of $500 billion. (That’s in addition to the shares Disney is buying.) That implies Disney’s licensing payment is dependent on OpenAI’s valuation rising in the future.”
“You’d think Disney would be getting something a bit more solid. After all, the company deserves a huge licensing fee, one worth shouting about from the rooftops, considering that allowing the use of its characters on Sora will massively enhance the nascent OpenAI app.”
“Other aspects of the deal also appear to favor OpenAI. Disney is putting in money for an equity stake it can ill afford, given that it only had $5.7 billion in cash on its balance sheet at the end of September. Disney is also committing to becoming a “major customer” of OpenAI, which implies it will spend money on OpenAI services. And Disney is letting OpenAI use its good name as a shield against criticism from some in Hollywood about the dangers of Sora making clips that feature famous people without their permission. (It’s worth noting that Iger has ties to OpenAI investor Thrive, which may have facilitated the negotiation.)”
So some circular elements in this AI deal as well as in many others that are seeing their ups and downs.
All this is of course a movie we’ve all seen before.
Long-time observers may recall similar defense/offense moves after Google bought YouTube almost two decades ago, and it’s litigation and ultimate marketing deals with Viacom and others around its content at that time.
These two events with Disney this week just mark a similar stage of ‘Fair Use’ content/copyright differences, discussions and deals in this AI Tech Wave.
We’re still at the early stages of these dances and deals. Stay tuned.
(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)
