Can Hollywood Do AI?: What Disney's Failed 1 Billion Deal with OpenAI Says
[19:07 Sun,29.March 2026 by Thomas Richter]
The surprising end for OpenAI&s video AI Sora, especially for Disney, which had concluded a 1 billion deal around Sora just a few months ago. According to rumors, Disney learned about the end of Sora shortly after a joint meeting with OpenAI representatives where they were working together on a Sora project.
Disney&s strategy for a future with AI now lies in ruins. The original plan to acquire know-how regarding generative video AI from OpenAI in exchange for an investment including a stake in the company, in order to use this technology itself, will come to nothing. And the hope of monetizing Disney&s valuable IP—well-known characters from Disney&s diverse content universes, such as those from classic animated films like Mickey Mouse, Donald Duck, Lilo, Stitch, Ariel, Cinderella, as well as characters from Pixar hits like *Monsters, Inc.* and *Toy Story*, up to the famous characters from *Star Wars* and the Marvel Cinematic Universe (MCU)—through user-generated content is shattered for now. Using OpenAI&s Sora app, users were supposed to create AI short videos featuring popular Disney characters via Sora, and Disney would have published the best of these selected videos on its streaming portal Disney+, thus benefiting from crowd-funded creativity.
Disney CEO Bob Iger proudly stated about the agreement:
The combination of Disney&s iconic stories and characters with OpenAI&s groundbreaking technology puts imagination and creativity directly into the hands of Disney fans—in a way we have never experienced before. This allows them to connect with the Disney characters and stories they love in an even more intense and personal way.
### Consumers Are Not Creators However, the whole thing was possibly based on a misjudgment: the vast majority of viewers only want one thing: to watch and not to be actively involved. Only a small percentage is responsible for the content seen on TikTok, Instagram Reels, or even YouTube—a social network that assumes and depends on users constantly generating individual memes featuring themselves and Disney characters is doomed to fail from the outset. Most users are consumers and not creators. The prospect of free content, which Hollywood studios have long envied from major social networks or video portals like TikTok, Instagram, or YouTube, was apparently too tempting.
Another aspect of the failed deal concerns the plan to use Sora technology on a large scale in professional film production: Disney now has to find a new partner in the industry with sufficient AI know-how and write off the investments made so far in working with OpenAI.
### Runway Lionsgate Deal - Also Failed? But this failure might indicate a larger problem Hollywood has with video AIs, as it has also gone quiet around the deal between the video AI Runway and the film studio Lionsgate, which was announced with great fanfare in September 2024. The deal is stalling and might also fail. The plan there was to train a proprietary video model using Lionsgate&s content to use generative AI legally and stylistically safely in film production with the goal of saving time and money. It was initially intended to use the new model for pre-production tasks like storyboarding or pre-visualization, and then also for backgrounds and special effects like explosions to save "millions and millions of dollars."
The problem: Lionsgate&s film catalog was not sufficient to train a proprietary video model—reportedly, not even Disney&s much larger archive would have been enough. This means the basis for a proprietary video AI using a legally "clean" origin for the training material for the commercial use sought by Lionsgate is missing.
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### Netflix Does It Differently Hollywood&s big competitor is already a step ahead and shows the more likely path for using AI in professional film production, which is much more modest. In early March 2026, Netflix acquired InterPositive, the company founded by the well-known actor and film director Ben Affleck, for million. InterPositive develops AI tools specifically for professional film productions. Video models are not used here to generate new content but rather to assist with individual tasks in the production of a film in the form of tailor-made tools.
Here, a proprietary AI model is trained based on the existing film material and thus adapted very specifically to that film, for example, regarding its look and the visual vocabulary of the cinematographers and directors, and can thus deliver suitable results. The model can then use this "knowledge" acquired through the input of dailies in post-production for all individual steps in the classic workflow, such as editing, color correction, VFX, and more.
However, these tools are designed so that creative decisions strictly remain in the hands of the artists. Here, AI is not supposed to replace artists but to facilitate their work—a slightly different goal than what Hollywood studios seem to have in mind. Hollywood studios seem not to have fully understood the new technology and are guided by their greed to save money, overlooking the potential of AI as a simple—not revolutionary, but evolutionary—tool in the service of classical filmmaking craft.
