OpenAI’s decision to scrap Sora means its $1bn deal with Disney is over. A few thoughts on why the House Mouse may have had a lucky escape… It’s strange to think that it was only about six weeks ago that Disney made what could have been a far-reaching update to its streaming service. For it ... Disney, Sora, and an AI bullet dodged – for now
OpenAI’s decision to scrap Sora means its $1bn deal with Disney is over. A few thoughts on why the House Mouse may have had a lucky escape…
It’s strange to think that it was only about six weeks ago that Disney made what could have been a far-reaching update to its streaming service. For it was in early February that outgoing CEO Bob Iger announced that his company had made a $1bn deal with OpenAI, which would have seen the latter firm’s generative AI video app, Sora, embedded within Disney+.
Through it, subscribers would be able to create their own clips featuring Disney’s huge library of characters – albeit with a few limits in place. Perhaps to avoid provoking an angry response from actors’ unions, there would be 250 characters that users could conjure up, and none of them would have human faces or voices. So, presumably, no Luke Skywalker or other person-shaped Star Wars characters, or any Marvel superheroes for that matter.
The deal with OpenAI was bi-directional – Sora would appear in some form as a widget on Disney+, and Disney characters could legally appear on OpenAI’s Sora 2 platform, which doubles as a TikTok-esque social media platform as well as video generator.
Inevitably, the move was hyped as great news for both parties, with Iger theorising that the interactive element would “enhance engagement” with its streaming platform.
“It jumpstarts our ability to have shortform video on Disney+,” Iger said. “Additionally, it’s our hope that we will use the Sora tools to enable subscribers of Disney+ to create shortform videos on our platform.”
At the time, it was thought that the new function would go live within a matter of months – there was a vague window of “sometime in fiscal 2026,” meaning it could have emerged as recently as this June.
If you’ve been keeping up with current events, you’ll know what’s happened since: OpenAI has rather dramatically announced that it’s scrapping Sora entirely.
Although it hasn’t given a precise date for when the service will be wound up, the AI giant says it has decided to concentrate its efforts – and seemingly infinite sums of investors’ cash – in other arenas, including ChatGPT and its planned move into robotics.
From the outside, the news seems rather abrupt. Although Sora has been around since late 2024, it was Sora 2, which launched in the autumn of 2025, that caught the world’s attention when it launched in September 2025. As social media filled up with clips generated by the platform, think pieces were written about Hollywood’s imminent doom. After all, if you could generate an (almost) photoreal action sequence with a line or two of text, what use were filmmakers anymore?
Meanwhile, the whole issue of copyright reared its head again. Much to the glee of its early adopters, Sora 2 was capable of generating clips of Mario the bouncy Italian plumber evading police, his kart hammering down an American highway. SpongeBob SquarePants could be made to cook crystal meth like Walter White. Rick and Morty could be drafted in to shill dodgy cryptocurrencies.
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In short, it was all a legal nightmare, and whether it was an accidental or deliberate oversight on OpenAI’s part or not, Sora 2 launched with few if any guardrails in place to prevent such clips from being generated.
As the Motion Picture Association and other entities raged against this disregard for copyright law, OpenAI initially made half-hearted noises about giving companies an ‘opt out’ option, so that their imagery or characters wouldn’t appear on Sora 2. Then they started introducing measures that would flash up an error if a user’s prompt asked the platform to generate anything too legally suspect. (Even so, ways were still found to get around those guardrails on occasion – there are Reddit pages devoted to the subject.)
Such was the potentially nightmarish situation Disney blundered into when it made its deal with OpenAI in February. OpenAI no doubt made all kinds of reassurances to Disney that safety measures will be in place, and that users wouldn’t be able to make, say, Mickey Mouse do something absolutely unspeakable to another animated character.
But as history has previously shown us, it’s nigh-on impossible to create some sort of create-and-share service without its users causing mischief.
Nintendo, one of the most risk-averse companies on the planet when it comes to protecting its image, spent years fretting over adding online multiplayer elements to its games. Years after its competitors, it began to integrate online functions towards the middle of the 2000s. Eventually, it found the confidence to launch The Legend Of Zelda: Tears Of The Kingdom, which presented players with a sandbox of interlocking physics and construction systems to play with. Players could then share clips of their creations on social media.
Within days, certain clips from the game went viral. One player had made a short video of a gigantic wooden effigy with bombs for testicles, which exploded in comic fashion, igniting a similarly outsized phallus.
Antics like these are so common in online games that developers have a name for them: time to penis.
“There is absolutely nothing that can stop it,” game designer Alex Hutchinson, who worked on the pioneering simulation game Spore, told me in 2023. “Almost anything in the right light or at the right angle can look like a penis. A stack of boxes. Anything. The execs were terrified but you can’t create a filter, you can’t use templates, nothing. In the end we realised we just needed a way to ban and report. Like pornography, people know it when they see it, so they can do it by hand.”
Even with various limits put in place by programmers, there’s no accounting for what Disney+’s more imaginative (and mischievous) users might have come up with. Just as it’s impossible to give players a sandbox and predict what they’ll do with it, there’s no way of guessing how people interacting with an AI video generator might get around any road blocks put in their way.
The addition of such a function would, over night, turn what was a walled garden into the wild west. A small corner of Disney+ would become like YouTube or TikTok – an online service that needs constant moderation and vigilance. And like Nintendo, Disney has a decades-old, family-friendly image to maintain; it’s meant to be the brand that parents can trust. A Sora clip needn’t even be pornographic or violent to be deeply embarrassing for Disney.
The OpenAI-Disney deal felt suspiciously like a legacy company rushing to get on a hype train to appease its investors. After all, if AI is being sold to us as the future of absolutely everything, wouldn’t not adding it to your platform mean you’re yesterday’s news?
OpenAI’s abrupt departure from the meme-generating game may have given Disney a lucky escape. Even setting the content moderation headache aside, there’s the question of Disney’s standing among the creative people who work within it.
This is the company that invented the feature-length animated film. That was founded on drawing and painting, of bringing images to life. Outside big tech, generative AI is an immensely thorny subject, and while some creatives are enthused by it, there are plenty of filmmakers and artists who are disgusted by it.
Since February, Bob Iger has stepped down as CEO; in his place comes Josh D’Amaro, formerly the boss of Disney’s theme parks. What happens next will come down in no small part to his own attitude to gen-AI. He may be keen to pursue the idea of a clip generator at another company – Seedance 2.0 and Google’s Veo are but two other AI video apps he could turn to.
For now, though, it looks as though Disney dodged a bullet. Unless another deal is made, Mickey Mouse is safe from appearing in a billion embarrassing AI slop clips.
