The Walt Disney Company’s $1 billion equity investment in OpenAI will serve as “a way in” to artificial intelligence, which will have a significant long-term impact on Disney’s business, Disney CEO Bob Iger told CNBC’s “Squawk on the Street” on Thursday.
“We want to participate in what Sam is creating, what his team is creating,” Iger said. “We think this is a good investment for the company.”
Disney announced its investment in OpenAI as part of an agreement on Thursday that will allow users to make AI videos with its copyrighted characters on the startup’s app called Sora.
More than 200 characters, including Mickey Mouse, Darth Vader and Cinderella, will be available on the platform through a three-year licensing agreement, which Iger said would be exclusive to OpenAI at the beginning of the term.
As new AI products have exploded into the mainstream, several media companies, including Disney, have taken legal action in an effort to safeguard their intellectual property.
Iger said Disney has been “aggressive” at protecting its IP, but he has been “extremely impressed” with OpenAI’s growth as well as their willingness to license content.
“No human generation has ever stood in the way of technological advance, and we don’t intend to try,” Iger said. “We’ve always felt that if it’s going to happen, including disruption of our current business models, then we should get on board.”
Shares of Disney are up more than 1% on Thursday.
Barton Crockett, a senior internet media research analyst, told CNBC that Disney’s investment is “a great endorsement for OpenAI.”
He said it’s important for companies like Disney to understand the importance of user-generated and AI-generated content.
“I think it’s crucial for a content-creation company, like Disney, to get ahead of that,” he said.
OpenAI launched Sora in September, and the short-form video app allows people to generate content by simply typing in a prompt.
The app quickly rose to the top of Apple’s App Store, but as users flooded the platform with videos of popular brands and characters, large media players began to raise concerns around safety and copyright infringement.
Iger said Disney’s deal with OpenAI “does not in any way represent a threat to creators at all,” in part because characters’ voices as well as talent names and likenesses are not included.
“In fact, the opposite,” Iger said. “I think it honors them and respects them, in part because there’s a license fee associated with it.”
OpenAI CEO Sam Altman said there will be guardrails in place around how Disney’s characters will be used on Sora.
“It’s very important that we enable Disney to set and evolve those guardrails over time, but they will of course be in there,” Altman told CNBC on Thursday.
WATCH: Watch CNBC’s full interview with Disney CEO Bob Iger and OpenAI CEO Sam Altman
