REPORT: Josh D’Amaro’s Disney Cancels Bob Iger’s $1 Billion AI Deal
The Walt Disney Company has quietly stepped away from one of its most closely watched technology partnerships.
The move follows a year of growing conversation around artificial intelligence in entertainment, as studios test how far the technology can be integrated into storytelling, streaming, and theme parks. Disney has been one of the most visible players in that shift.
Its use of AI has not gone unnoticed. From theme park announcements to artwork on Main Street, U.S.A., the company has faced consistent criticism from fans uneasy about how the technology is being used.
The anti-AI backlash intensified in 2025, when Disney announced plans to invest $1 billion into OpenAI. The three-year deal marked a significant step into the AI space and signaled confidence in where the technology was heading.
A Short-Lived Bet on Sora
OpenAI’s Sora video model quickly became central to Disney’s plans.
While OpenAI is best known for ChatGPT, Sora — an AI tool capable of generating video from text prompts — was what drew Disney in. Under then-CEO Bob Iger, the company agreed to allow its characters to be used within AI-generated content.
Fans were told they would be able to interact with Pixar, Marvel, and Star Wars characters through Sora, either via Disney+ or OpenAI’s own platforms. That meant open season on everyone from Mickey Mouse to Darth Vader.
The concept suggested a more interactive future for Disney’s biggest franchises. But the rollout proved complicated.
Within days, controversial AI-generated images and videos featuring Disney characters began circulating online, raising concerns about how the company’s intellectual property could be used — or misused — in an open system.
Now, Disney’s controversial OpenAI partnership has come to an end.
The company, now led by CEO Josh D’Amaro following a leadership change earlier this month, confirmed it is exiting the deal. The timing aligns with OpenAI’s decision to shut down Sora.
Disney has cancelled their deal with OpenAI.
They planned to invest $1 billion into the company and let Sora have access to AI generate videos of characters from Disney, Marvel, Pixar and Star Wars.
(Source: https://t.co/9q8u5VtqZE) pic.twitter.com/tJXdArKz9X
— DiscussingFilm (@DiscussingFilm) March 24, 2026
“We’re saying goodbye to Sora,” Sora said in a statement on X, formerly known as Twitter. “To everyone who created with Sora, shared it, and built community around it: thank you. What you made with Sora mattered, and we know this news is disappointing. We’ll share more soon, including timelines for the app and API and details on preserving your work.”
Disney’s AI Strategy Isn’t Going Away
The end of the deal does not mark a broader withdrawal from AI.
Disney has indicated it remains open to future partnerships, emphasizing that its approach to artificial intelligence is still evolving as the technology develops.
“As the nascent AI field advances rapidly, we respect OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere,” a spokesperson said (via The Hollywood Reporter). “We appreciate the constructive collaboration between our teams and what we learned from it, and 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.”
D’Amaro has also signaled that AI will remain part of Disney’s long-term strategy.
“Innovation has always been part of Disney’s DNA,” D’Amaro said (via Deadline). “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.”
He reiterated that position during the 2026 Annual Shareholders Meeting, framing AI as a support tool rather than a replacement for creative work.
“At Disney, creativity is always led by people that will always be the case,” he said. “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.”
Analysts have pointed to AI as a key area for Disney as it looks to balance innovation with audience expectations. The company’s next steps will likely determine how it navigates that tension.
Has Disney made the right move exiting its OpenAI deal?
