The Walt Disney Company and OpenAI Partner on Sora

AI has driven the corporate suites of these companies insane.

> As part of the agreement, Disney will make a $1 billion equity investment in OpenAI, and receive warrants to purchase additional equity.

I don't know what kind of hypnosis tricks Sam Altman pulls on these people but the fact that Disney is giving money to OpenAI as part of a deal to give over the rights to its characters is absolutely baffling.

OpenAI and ChatGPT have been pioneering but they're absolutely going to be commoditized. IMO there is at least a 50:50 chance OpenAI equity is going to be next to worthless in the future. That Disney would give over so much value and so much cash for it... insane.

If OpenAI has exclusive rights to AI generation for Disney and other IP rights holders, that would create the kind of moat they've been missing so far.

All the more reason it's insane for Disney to be the one giving money!

Why does Bayer spend what it spends putting its brand in front of you?

There’s no direct return.

They’ll get every dollar of that billion in mindshare over the next twenty years.

But Sam Altman has already said that they need to be able to ignore copyright laws because the Chinese are going to ignore them too. How is access to Disney IP a moat if everyone involved (except Disney) gives no shits about copyright?

> OpenAI and ChatGPT have been pioneering but they're absolutely going to be commoditized.

I am not sure that it is very interesting that LLM apis are a commodity. It's not even a situation where it is _going_ to be a commodity, it already is. But so is compute and file storage, and AWS, Google and Microsoft etc have all built quite successful businesses on top of selling it at scale. I don't see why LLM api's won't be wildly profitable for the big providers for quite a long time, once the build out situation has stabilized. Especially since it is quite difficult for small companies to run their own LLMs without setting money on fire.

In any case, OpenAI is building products on top of those LLMs, and chatgpt is quite sticky because of your conversation history, etc.

Disney only exists now to exploit the IP it has bought. They just want to join the circle of OpenAI, Nvidia, Microsoft et al making meaningless deals with each other.

I do wonder if this $1B is effectively protection money to stop OpenAI from bulldozing any more copyright laws.

> but they're absolutely going to be commoditized

I've been thinking the same since GPT3 too, and since ChatGPT, and since Claude and... But here I am, still paying for ChatGPT Pro because it's literally has the best model you can get access to for a fixed price each month, and none of the others so far come close. I still use Anthropic's and Google's models to compare/validate against, because I assumed at one point they'd surpass OpenAI, but so far they haven't. This all makes me believe less and less each day that it'll actually be commoditized.

If Disney could throw concepts at their properties like Mickey Mouse Clubhouse or Paw Patrol or any of their other CG shovel content (which my kid loves, of course) and have a new episode every day of the year, they would, and this lets them do that without employing the staff to make that happen. If all it took was a writer to put a pitch together and Sora to turn out an episode, that'd be a steal for $1B.

How is buying equity "giving money"?

Is it charity to buy AAPL as well?

I really don't understand your perspective

> commoditized

not for disney content. Disney can pick OpenAI as the winner for this by not signing deals and suing anyone else.

Thats a business agreement not a moat. And you might have rights to generate the characters but they still need to do something. You only have to look at the repeated Disney flops to see they themselves have no ideas.

Disney is buying equity from OpenAI. You frame it as "giving OpenAI money" because you hold a (quite insane) assumption that OpenAI's equity is worth nothing.

They think OpenAI equity will be worthless so it's "giving money." Obviously Disney disagrees.

And if you're the only company with that business agreement. As long as you still have it, it's a...moat.

If 3 or 4 competitors can all provide a mostly identical product, isn't that a commodity? That is essentially the case right now, with the different companies playing around with UI, integrations and business model.

If all models were equal then sure. But for professionals who use these to solve complex problems and need correctness above all? The models and weights are not equal and interchangeable.

_Disney_ needs to buy mindshare? From the company that’s happy to steal it anyway?

This feels like more funny accounting.

That's interesting. I think besides the hard facts (like numnber of possible tokens before throtteling happens) the perceived quality differs from use case to use case. In that sense, ChatGPT is my daily driver, in terms of helping with coding problems or debugging Claude feels far superior to me. And when it comes to ideation and creativity (product idea validation, etc.) Gemini surpasses both of the other in my opinion.

But what could possibly be the secret sauce? Whatever it is, eventually enough engineers will move between orgs to get that stuff cross-pollinated.

Certainly there’s little to suggest that it has much to do with Altman’s leadership or a culture of engineering excellence/care that has been specifically fostered at OpenAI in a way that isn’t present at Facebook or especially at Google.

Looks like he changed his mind.

Well that’s the thing with moats - they don’t just disappear one day.

Buying already existing shares of a public company is very different from buying just-created shares of a private one.

You literally are just handing them money for a piece of paper that says “lol you now own x% of whatever this thing turns out to be worth in the future.”

I think OpenAI having the best model still isn't enough. The AI marketplace isn't really in a race to the top, it's in a race to the mass market middle. If Gemini is good enough for the majority of people to complete the majority of tasks they want to then market effects and bundling can get an already dominant company like Google to take over the market. And that's without considering the integration possibilities, e.g. Gmail and Google Docs.

That doesn't mean everyone will use Gemini. As a software engineer I prefer Claude Code and will pay good money for it. I'm sure there will be plenty of other specialisms that will have preferred models. But OpenAI's valuations are based on the idea that it's going to be everywhere, for everything, all the time. And I'm skeptical. ChatGPT Pro is a $200 a month product. That's not a mass market proposition.

These kinds of parternships also throw in free inference with MFN clauses, which make a mutual moat.

A moat doesn't have to be a feature, and equity stakes have been fairly successful moats (eg. Much of AWS's ML services being powered by Anthropic models due to their equity stake in Anthropic).

And how much are you paying? I pay $20 a month, but I doubt OpenAI makes money on me; they probably lose a lot.

These kinds of equity deals tend to include MFN clauses around inference pricing. Ik Anthropic did something similar a couple years ago.

Pro is the $200/month plan

Shares are always "x% of whatever this thing turns out to be worth in the future". It can be something, it can be nothing.

Disney is giving them money in the hopes that the AI market (bubble?) keeps growing and the value of OpenAI grows with it. And importantly, Disney wants to shift to AI generated slo... content so partnering with a top player with a proven product is a safe choice. Disney licenses its IP to OpenAI, OpenAI can then provide tools that generate said content Disney-style.

> Disney will become a major customer of OpenAI, using its APIs to build new products, tools, and experiences, including for Disney+, and deploying ChatGPT for its employees

At what point does OpenAI become akin to AIG and 'too big to fail'?

A moat is a permanent feature protecting a castle against attack. That’s the metaphor. If it’s not their own device intrinsically protecting them then it’s not a moat in my book.

> But for professionals who use these to solve complex problems and need correctness above all?

Is that the same thing as making bootleg graphics involving Disney characters?

That is not how we use the term "moat" in this context, because competitors eventually converge on offerings within 1-2 years.

I don't need some stuck up HNer telling me about stuff I deal with in my day-to-day job.

Edit: can't reply

> a business deal that can be transferred to a new partner the second it expires is much more temporary

Generally, these kinds of equity deals include an MFN clause.

Afaict it might be another circular deal? They buy equity (at what evaluation?) and options, and license some IP (is this the billion flowing straight back?) to OpenAI (not to SORA users?) for very restricted use cases, with a commitment from OpenAI to support Disney's copyright racketeering.

> Disney is buying equity from OpenAI.

Can you buy equity from OpenAI without also giving OpenAI a license to use your IP? Even if the equity is worth $1 billion, how much is Disney's IP license worth?

I wouldn’t rule either|both out.

None of the companies you see on TV need to buy mindshare - because they did yesterday, and will again tomorrow - so why not save today’s spend?

Out of sight, out of mind: especially as media consumption towards individual creators.

> good enough for the majority of people to complete the majority of tasks

It will never be this. There is always the expectation of being able to do more things.

"Log into my work email and deal with all of them whilst I have a bath".

"Start a company for me to earn some extra weekend cash by washing peoples driveways. Find and hire some people to do the actual washing"

"Find a nice house for me by a lake, negotiate a good price and buy it (get a mortgage if necessary) then book all the removals services and find me a new job nearby".

> That is not how we use the term "moat" in this context, because competitors eventually converge on offerings within 1-2 years.

Then I guess we need a new term because that's not how I interpret the term moat either. To me, ChatGPT chat history is a moat. It allows them to differentiate their product and competitors cannot copy it. If someone switches to a new AI service they will have to build their chat history from scratch.

By comparison a business deal that can be transferred to a new partner the second it expires is much more temporary.

No? What kind of unrelated "gotcha" is this?

No business moat is permanent.

> To me, ChatGPT chat history is a moat.

Every service has a chat history. You are talking about stickiness, which is (roughly) the same for every product.

ChatGPT wins a bit with stickiness because their AI personalizes itself to you over time, in a way that others don't quite do.

A moat is something unique. It can't really be a moat if all services offer it.

Right, but the distinction is that if I go buy a few thousand shares of DIS today, I'm not handing money to the Disney company, rather I'm handing it to the previous owners of those shares. The total pool of them is fixed, so it's all basically zero sum. At most my purchase might signal (in a microscopic way) to the market that there's demand, and push up the price, which benefits Disney.

It's very different when a privately held company creates new shares to sell, because then the money used to purchase those shares really does go right back to the company.

OpenAI equity is worthless now. It's a company that absolutely cannot turn a profit, not with how much they're spending. And with a CEO that regularly lies about... everything (I'm sorry, you can't just spin up hundreds of gigawatts of power generation, especially not in the US, but also because the only company that makes gas turbines has a seven-year backlog).

The only people who don't think it's worthless are the people who would be worth a lot less if that were the case. Hug your loved ones and make peace with your gods, because the crash is going to be insane.

I use them every day for coding and Gemini 3 pro, Opus 4.5, and GPT 5.1 (haven’t tried 5.2 yet) are basically identical in terms of ability. Opus 4.5 has a slight edge in my personal experience so far.

>"how much is Disney's IP license worth"

It unspoken business model is giving an IP license to anyone that can breathe at make a rev share agreement or hefty sum - so, less than you think.