Starting in 2026, you may be able to create images and videos through OpenAI platforms that draw inspiration from Mickey Mouse, Cinderella, Iron Man, and hundreds of other characters that fall under Disney’s intellectual property.
On Thursday, Dec. 11, global entertainment and media conglomerate Walt Disney (NYSE: DIS) entered into an agreement with OpenAI that involves Disney licensing its content for Sora, OpenAI’s short-form generative AI video platform.
The deal, which will see Disney injecting $1 billion into OpenAI over the course of three years, serves as a significant step along the path to establishing best practices and standards for the use of AI in entertainment.
Speaking on the agreement, Disney CEO Bob Iger told CNBC that the deal gives the company “an opportunity to play a part in what is really a breathtaking growth in AI and new forms of media and entertainment.”
Iger added that the deal will enable OpenAI to put guardrails around how Disney characters are used in a rapidly evolving generative AI landscape.
For investors curious about how the partnership could impact their holdings, here is how the equity agreement could translate into notable share appreciation.
Disney’s Deal Will Bolster OpenAI’s Sora Platform
The news comes in the wake of Disney’s numerous legal threats against AI companies that have used its copyrighted material, as well as the Motion Picture Association urging OpenAI to take "immediate and decisive action” to prevent copyright infringement on Sora—its AI-powered text-to-video model created by OpenAI that generates realistic animated videos.
According to a press release from OpenAI about the landmark agreement, “it marks a significant step in setting meaningful standards for responsible AI in entertainment.”
Under the three-year licensing deal, OpenAI can use over 200 characters from Disney, Marvel, Pixar, and Star Wars franchises to create user-generated short videos through Sora. In turn, the agreement will make a selection of these fan-inspired Sora short-form videos available via streaming on Disney+, the streaming service of the consumer discretionary giant that in 2025 boasts 131.6 million subscribers and contributes $24.6 billion in direct-to-consumer revenue. Notably, the agreement excludes talent likenesses and voices.
The Disney-OpenAI Equity Agreement Is a Potential Boon for Investors
As part of the licensing agreement, the deal positions Disney to become a major investor in and customer of OpenAI. Specifically, Disney will gain access to OpenAI’s application programming interfaces (APIs) with the ability to develop new products, tools, and experiences for its Disney+ customers, as well as deploy ChatGPT for its employees.
The $1 billion equity deal also provides Disney with the right to purchase additional equity. That could ultimately prove to be a fruitful outcome for shareholders, with speculation that OpenAI is gearing up for an IPO that could come as soon as late 2026 or early 2027.
On Dec. 12, financial services firm Morningstar reported that it does not expect the Disney-OpenAI deal to “move the needle,” but added that the development “provides further support to our wide moat rating for the stock.”
Specifically, Morningstar noted that while the deal does not alleviate concerns about AI’s disruption in the media and entertainment landscape, it proves the value of Disney’s intellectual property and, importantly, its ability to adapt to a constantly shifting technological landscape.
Additionally, the firm postulates that Disney will be able to monetize engagement of these forthcoming short-form videos—something it otherwise would not have participated in—”without offering OpenAI access to long-form video entertainment, where [Disney] does participate.”
The Deal Could Bolster Disney’s Short-Term Momentum
Disney will likely be tapping into a new revenue stream beginning in early 2026 when it begins to curate Sora short-form videos and make them available on Disney+. That has the potential to fortify the stock’s recent momentum, which has seen 12 consecutive quarterly earnings beats.
While the stock is still down more than 36% over the past five years, it has also gained more than 36% since hitting its one-year low on April 4.
That sentiment is being reflected on Wall Street. Current short interest in Disney stands at just 1.09% of the float—or $2.06 billion—down significantly from the $4.79 billion worth of shares shorted in Q1 2020 when the stock had its most sizable short position over the past five years.
At the same time, institutional ownership remains healthy at more than 65%, with inflows of more than $29 billion exceeding outflows of more than $15 billion over the past 12 months. Analysts rate the stock a Moderate Buy, with the average 12-month price target implying 20.35% potential upside.
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
The article "Disney's $1 Billion Deal Brings Its Magic to OpenAI" first appeared on MarketBeat.
