Before Disney‘s officially sanctioned AI-generated versions of Mickey Mouse, Darth Vader, Baby Yoda, Deadpool and more debuted in OpenAI‘s Sora, the AI company abruptly pulled the plug on the video app.
Could it be a blessing in disguise for Disney?
For Bob Iger, who officially stepped down as Disney’s CEO earlier this month, the OpenAI pact was meant to be one of his final signature deals — giving Disney an on-ramp to the exploding world of AI. Disney also was going to plow $1 billion into OpenAI as part of the relationship.
The OpenAI deal “gives us an opportunity to play a part in what really is breathtaking, breathtaking growth” in artificial intelligence, Iger said at the time.
But while Iger may have envisioned dollar signs — predicated on the assumption that there would be enthusiastic engagement by fans to create their own AI versions of 200-plus characters licensed to OpenAI that would be popped into Disney+ — many aficionados of Disney’s franchises were not, in fact, excited about what Sora’s video generator might do to the likes of the Avengers superheroes or the characters from “Frozen” or “Moana.”
And despite Iger’s bullishness on the Sora deal, other Disney execs were said to be concerned that going into business with OpenAI would expose the Magic Kingdom’s crown jewels to the risk of being turned into so much AI slop, according to industry sources. Hollywood unions — for which AI adoption has been a hot-button issue — weren’t thrilled about the Disney-Sora deal either. “Disney’s announcement with OpenAI appears to sanction its theft of our work and cedes the value of what we create to a tech company that has built its business off our backs,” the Writers Guild of America said in December.
As recently as Monday, teams from Disney and OpenAI had met about the Sora project — then, 30 minutes after that meeting had ended, the Disney side was informed that OpenAI was killing off the video app, according to a Reuters report.
Clearly, a major focus for Disney’s work with OpenAI on Sora was going to be ensuring strong guardrails against, say, Ariel or Cinderella saying or doing inappropriate things. But OpenAI, which launched the Sora stand-alone app in September 2025, had shown a classic Silicon Valley move-fast-and-break-things approach to generative-AI video. Initially, OpenAI had an “opt-out” policy for Sora in which rightsholders would have to actively tell it to exclude their IP from the system — angering Hollywood studios and talent agencies. Meanwhile, after Sora users generated “inappropriate” depictions of public figures including Martin Luther King Jr., Michael Jackson and Mister Rogers, OpenAI restricted such uses… only after complaints from the families’ estates.
As for the fear that an AI-generated Disney-owned character might do something unexpected or offensive, it’s worth noting that this actually did happen.
After Epic Games and Disney added a Darth Vader character to “Fortnite” in May 2025, some users had managed to prompt the Sith Lord to drop the F-bomb and use a homophobic slur, according to a Wired report — in an AI-generated voice of the late James Earl Jones. (Epic said it quickly fixed those issues.) Separately, SAG-AFTRA filed a unfair labor practice charge with the National Labor Relations Board over the use of Jones’ iconic voice in “Fortnite,” saying that even though the late actor’s family had granted approval for it, the AI re-creation had not been cleared with the union; the complaint was settled last July. (On Tuesday, Epic Games, in which Disney has invested $1.5 billion, said it is laying off 20% of its employee base, axing just over 1,000 staffers, citing a drop in “Fortnite” usage.)
It’s worth noting that Disney’s Sora deal encompassed only “masked, animated or creature characters” — not human actors. That, presumably, is because human actors would be reluctant to have approved their name, image and likeness for use in whatever the Disney-Sora thing was going to be. But along those same lines, sources say, Disney was encountering roadblocks in getting the OK from voice actors for the Sora pact.
So far, OpenAI hasn’t really explained why it is mothballing Sora. But the decision appears related to OpenAI’s potential IPO later in 2026, rather than about problems of weird or inappropriate AI video creations. The Sora app consumed vast amounts of computing power, and given unproven monetization models for it, OpenAI’s strategy appears to be aimed at shifting resources to other areas, including the Holy Grail of the sector — artificial general intelligence (AGI), a hypothetical tipping point in which AI systems match or exceed human intelligence in performing a broad range of tasks.
On AI, where does Disney go from here? Whatever its next step is, Sora’s shuttering will give the company a chance to reset its strategy.
Josh D’Amaro, the former parks boss who’s now in his second week as Disney’s CEO, has not commented specifically about the now-dissolved OpenAI partnership.
In his first day on the job, he sent a memo to company employees that generally said Disney will continue to “embrace technology to unlock new possibilities.” D’Amaro wrote: “Innovation has always been part of Disney’s DNA. Used thoughtfully, it can empower our storytellers, strengthen our capabilities, and help us create more immersive, interactive, and personal ways for people to experience Disney.”
At the 2026 Disney shareholders meeting, in response to a question about the Mouse House’s use of AI, D’Amaro said that the company is “approaching this very thoughtfully.”
“At Disney, creativity is always led by people that will always be the case. Our goal with AI is to empower human creativity and not replace it. We want to give artists and filmmakers and designers better tools so that they can focus on what they do best,” he said.
At least publicly, Disney says it is still looking at ways it cap tap into the AI ecosystem. The company, in a statement Tuesday, said, “we will continue to engage with AI platforms to find new ways to meet fans where they are while responsibly embracing new technologies that respect IP and the rights of creators.”
But at this point, Disney may decide that “meeting fans where they are” means keeping its world-famous characters away from the AI machinery.
SEE ALSO: OpenAI Will Shut Down Sora Video App; Disney Drops Plans for $1 Billion Investment
