Disney’s AI Battle Begins
With Josh D’Amaro now in charge at The Walt Disney Company, things are different.
Finally, Disney has someone born in the 1970s running the company rather than the 1950s.
Photo: The Walt Disney Company
Seriously, Iger was born just five and a half years after the end of World War II.
That’s the person who has been in charge of Disney during most of the 21st century.
Photo: Getty
D’Amaro is no spring chicken, having recently turned 55, but he’s still new blood by Disney standards.
Now that the company has someone who understands AI as CEO, Disney can move forward.
Photo: Disney
Foremost on D’Amaro’s mind is how the company will handle the sudden rise of AI.
As Disney’s AI battle begins, here’s what you need to know.
Disney Led with Haymakers
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When Disney sued Midjourney and MiniMax, we should be honest about what that was.
Disney was punching down against companies that can barely afford legal representation.
Walt Disney Company
Okay, that’s a slight overstatement, but let’s be real. Disney’s the New York Yankees, and these are JV baseball players.
At some point, both businesses may grow into something more, but they weren’t that in 2025.
Later in the year, Disney led with a more aggressive haymaker, one that it may regret.
Disney sent a cease-and-desist demand to Google. Now, we’ve got a ballgame.
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Folks, Google has a market valuation of $3.77 trillion. Disney hovers around $190 billion.
In this scenario, Disney has the JV players, while Google is the New York Yankees.
Photo: Wikimedia
The difference in scale is stark, and it may be a fight that Disney cannot win.
I say this in spite of the fact that the law is clearly in Disney’s favor.
Midjourney
Businesses like Midjourney, MiniMax, and Google all trained their Large Language Models (LLMs) with trademarked works.
These AI corporations basically dared Disney to sue, similar to how pirated websites have behaved.
Frozen artwork generated by Midjourney A.I. Photo: New York Times.
The difference is that the law clearly delineates movie and television piracy.
Training LLMs isn’t something laws had ever considered because it’s such brazen trademark infringement.
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Disney’s lawsuits signify an attempt to claw back the company’s rights with its characters.
The company will likely win the fight against Midjourney and MiniMax.
Walt Disney Company
If Disney cannot beat lightweights like them, it’s over. But Google is a different conversation.
D’Amaro Could Pick a Big Fight
Photo: Miriam-Webster
Both parties would rather not fight, but if they did, it would be like last year’s YouTube TV squabble.
Nobody wins in those wars except for the lawyers. It’d be an interesting matchup, too.
Walt Disney Company
Disney would have the law theoretically on its side, but Google would have the financial power.
In mid-January, Deadline evaluated the legal matchup with a fair depiction of both sides.
Computer World
As the reporter notes, Disney’s first haymaker accused Google of operating a “virtual vending machine.”
Disney IP was what Google’s Gemini, Nano Banana, and VEO were serving.
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Obviously, Disney can and should defend itself, even against a corporate titan like Google.
In the short term, Google chose not to push back against Disney’s filing. It tightened patent controls instead.
Photo: Computer Hope
Still, I just asked Gemini to show me pictures of Darth Vader, and it did instantly.
Anyone who uses their AI video clip generators knows that those still work, too. Even though Google may have made an honest effort to stop trademark infringement, it’s happening anyway.
The LLMs just don’t respond to human input as well as the law would expect.
Walt Disney Company
Computers make their own rules. And that’s Disney’s big problem. There’s already no going back.
So, Disney’s options are to engage in prolonged legal battles with dozens of businesses or go with Plan B.
Disney Chose Plan B
(Photo by Jeff Gritchen/MediaNews Group/Orange County Register via Getty Images)
Even before D’Amaro earned the title of CEO, he’d already pushed for an AI initiative.
As I mentioned at the time, it’s a textbook example of, “If you can’t beat ‘em, join ‘em.”
Disney did just that in signing a landmark agreement with OpenAI…and the timing shouldn’t be lost on you.
Disney sent Google the cease-and-desist letter within 24 hours of the OpenAI agreement.
Anadolu/GettyImages
We may safely conclude that OpenAI requested that Disney do that to an AI competitor.
However, D’Amaro’s plan shows plenty of cunning, as it expands Disney’s revenue opportunities.
(Photo by Jesse Grant/Getty Images for 20th Century Studios)
For starters, Disney acquired a modest stake in OpenAI, whose value remains to be seen.
Should OpenAI turn into an also-ran in the AI race, Disney’s stake becomes virtually worthless.
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Conversely, a successful OpenAI likely becomes one of the top five corporations in the world.
At that point, Disney benefits greatly from its admittedly risky gamble.
Photo: verdemedia.com
That’s the less important tactic, though. The bigger one is how Disney licenses content.
Disney’s AI Battle Begins
Disney’s OpenAI deal includes an exclusivity clause for the first year, a point Iger has emphasized.
While I’m not convinced he can even work his smartphone, he understands revenue streams.
(Photo by Jesse Grant/Getty Images for Disney)
When Iger highlights that comment, what he’s really doing is setting up a bidding war.
Late in 2026, OpenAI’s exclusive licensing window ends, and that’s when the real game begins.
ABC
At that point, OpenAI can pay Disney for a longer exclusive window for legal AI usage of its characters.
Alternatively, Disney can open up the bidding to other AI businesses…like Google.
Photo: OpenAI
You see where I’m going with this. OpenAI is a privately owned company currently valued around $500 billion.
Even though Disney possesses a vested interest in OpenAI’s success, money matters.
Photo: Disney
Should Google offer Disney a sizable amount to use its characters legally, that’s a new revenue stream.
Disney could feasibly license its characters to several different AI services.
Disney
I suspect that’s D’Amaro’s play, as it accomplishes two equally important goals.
First, Disney makes lots of money from what’s plainly a passive income business model.
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Disney doesn’t need to do anything. AI companies like OpenAI and Google do all the work.
Meanwhile, Disney just cashes lucrative checks. But that’s not all. It gains control, too.
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The reason why D’Amaro pushed for the OpenAI deal is that Disney could make demands of a business partner.
OpenAI tightened its copyright controls to satisfy Disney. That was OpenAI’s concession.
Photo: Disney
Should Disney make other deals with businesses like Google, it could do the same with them.
That’s Disney’s real first move in its AI battle. It intends to pressure these companies as their business partners.
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