The Hidden Connection That Guaranteed the Disney & OpenAI Deal Before It Was Revealed
Plus: AI-powered dating, Amazon's AI recap failure to launch, and why Hollywood's mega-merger wars are really about data.
Some weeks, roughly 10 major things happen in AI that may impact our entertainment and cultural habits. This week? That number spiked to about 50.
Right on schedule, following our video on AI fakes on dating apps, Hinge founder Justin McLeod revealed that he’s stepping down from his CEO role at the company to work full-time on a new dating app powered by AI. The app, which was developed and will be under the same Match Group umbrella as Hinge, is called Overone. Launching in the first quarter of 2026, so March at the latest, the app will use AI and voice tools to optimize matches on the app.
The exact nature of the AI deployment is unclear, but the fact that these features weren’t simply added to Hinge indicates they’re aware of how delicate dating apps are when it comes to user behavior and change. Just a major interface or engagement shift can lead to the app suddenly shedding thousands of irritated users. So siloing AI into a new app, where such experimentation will likely be more palatable to AI-friendly users, was probably the right idea. “Our focus will remain on intentional innovation,” said McLeod. “[The AI-powered app will be] grounded in culture, creativity, and a deep understanding of how people connect today.”
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More on the Disney x OpenAI story below…
Amazon Rewinds Its AI
A few weeks ago, I gave everyone here a peek at how Amazon’s new AI-powered TV show recaps work in the Prime Video app. The beta rollout was limited to smart televisions, so it wasn’t something that casual mobile users had a chance to sample. Overall, the experience was pretty dry and lacked any sizzle that would necessarily inspire me to engage the feature any more than I would have my Web browser read articles to me, a feature that’s been around for years, but hasn’t really caught on.
Well, it turns out that Amazon’s AI recaps started returning errors and, shock, began hallucinating and getting details wrong on Season 1 of the Fallout TV series. GamesRadar+ tried the AI tool and reported yesterday that the AI recap tool incorrectly stated that a pivotal scene was set in the 1950s (instead of 2077), among other errors.
As of this writing, the tool appears to have been pulled from the app, presumably for retooling or perhaps abandonment. My assumption is that AI will eventually get good enough for this kind of task, but for now, AI is still best when closely shepherded by a human, and not left on its own to potentially lead other humans astray.
Game of Streaming Thrones
At this point, so much has been written and debated about Netflix’s acquisition of Warner Bros. for $72 billion, as well as the subsequent hostile takeover bid by Paramount, that most Hollywood insiders are already up to speed on the latest. However, there’s one aspect of the deal that I’ve seen scant attention paid to, and it could change everything.
Specifically, I’m pointing to how Netflix’s acquisition of Warner Bros. will give the company a treasure trove of training data that could, and likely will be, used to train a proprietary generative AI model for Netflix’s growing AI efforts. This summer I laid out how Netflix is already beginning to include AI-generated special effects in some of its streaming TV series, like The Eternaut.
Powered by Netflix’s internal Eyeline team, acquiring the intellectual property and massive library of filmed and animated shows and films would secure Netflix’s ability to build out a truly powerful and proprietary AI model from which it could produce a range of new content. Of course, mega acquisitions like these tend to move slowly, and Netflix could still get sidelined by Paramount’s David Ellison (son of Oracle founder and Silicon Valley legend Larry Ellison), who is backed by billions from Saudi Arabia, and President Trump’s son-in-law, Jared Kushner.
In addition to the higher cash offer, Paramount’s appeal to Warner Bros. shareholders is backed by an elaborate website called Building A Stronger Hollywood, where Ellison makes his case as to why Paramount owning Warner Bros. is better for streaming TV competition and audiences. The other bidder, Comcast, has been sidelined, as the bidding has gotten a bit too rich for almost anyone on the planet. Ellison even visited Trump officials in person in Washington, D.C., to make his regulatory case to the president, just a couple of weeks after Netflix CEO Ted Sarandos paid Trump a visit for the same reason.
Right now, the Hollywood community is faced with two relatively bad outcomes. A Netflix-owned Warner Bros. that will likely see fewer theatrical releases and shorter display windows, given Sarandos’s disdain for theatrical releases, or a Paramount-owned Warner Bros. that some in the largely left-leaning confines of Hollywood fear would inject conservative political culture into the framework of Warner Bros., as well as the potential concerns regarding Saudi involvement, and a direct link to the current U.S. president.
Either deal will likely mean massive layoffs in service of “synergy” and less bidding leverage for producers and directors looking to sell projects as they face a more consolidated major studio market. It’s also possible that no deal is finalized and Warner Bros. eventually remains independent. But that’s not likely, as Warner Bros. Discovery CEO David Zaslav, who was last seen traipsing around as a character in an AI-enhanced The Wizard of Oz in Las Vegas, is laser-focused on getting the studio sold, even if it takes a couple of years.
Game Over? OpenAI’s $1 billion-dollar Mousetrap
Finally, the most surprising development in recent days was the mic drop announcement from Disney that it was joining forces with OpenAI to license its characters and content to the AI giant, as well as investing $1 billion to secure equity in the tech startup. This turn sounds shocking, that is, until you remember that Disney CEO Bob Iger is a venture partner at Thrive Capital (founded by the aforementioned Kushner). On Dec. 1, OpenAI took an ownership stake in Thrive Holdings for an undisclosed sum. So Disney and OpenAI were already effectively in bed with each other weeks ago, via Iger. The Disney partnership was all but guaranteed.
Although Sora users won’t be given access to the names, likenesses, or voices of human actors who have worked for Disney (for now), they will be able to use AI to generate many of the studio’s most iconic characters. Disney confirmed a partial list of characters and franchises on the Sora AI menu includes: Mickey Mouse, Minnie Mouse, Lilo, Stitch, Ariel, Belle, Beast, Cinderella, Baymax, Simba, Mufasa, and animated versions of Marvel and Lucasfilm characters Deadpool, Groot, Iron Man, Loki, Thor, Black Panther, Captain America, Thanos, Darth Vader, Han Solo, Luke Skywalker, Princess Leia, the Mandalorian, Stormtroopers, and Yoda. The arrangement also affords generative AI access to the franchises Encanto, Frozen, Inside Out, Moana, Monsters Inc., Toy Story, Up, and Zootopia.
The three-year licensing deal will allow Sora users to create Disney-related outputs, and Disney will platform some of these outputs on its Disney+ streaming app for viewers. Disney will also use OpenAI’s APIs and tools to create its own AI products, which almost certainly will include an AI animation suite. I’ve been banging this drum all year: Animation is the most natural, immediate beachhead for AI to begin its true Hollywood takeover. I’ve been waiting for this moment, and it’s finally here, although I’ll admit I never expected the eventuality to result in Disney owning part of OpenAI.
“The rapid advancement of artificial intelligence marks an important moment for our industry, and through this collaboration with OpenAI we will thoughtfully and responsibly extend the reach of our storytelling through generative AI, while respecting and protecting creators and their works,” said Iger after the partnership was made public.
And in a strategically-timed countermove, just as the OpenAI deal was unveiled, Disney sent Google a cease-and-desist legal letter. “Google is infringing Disney’s copyrights on a massive scale, by copying a large corpus of Disney’s copyrighted works without authorization to train and develop generative artificial intelligence (‘AI’) models and services, and by using AI models and services to commercially exploit and distribute copies of its protected works to consumers in violation of Disney’s copyrights,” the letter from Disney’s attorneys stated.
And while Disney is picking and choosing which AI company gets to use its IP, the news hasn’t been well-received by many Disney fans or Hollywood professionals. Many entertainment insiders still see AI as an agent of IP theft, an indirect residuals killer, and a driving force for the loss of jobs across a wide swath of movie and television production roles. And unlike previous technology disruptions, it’s unclear how new jobs could be created by AI, save for a relative handful of professionals tasked with guiding various AI tools until they become more self-contained, error-free, and truly autonomous.
Where audio entertainment giant iHeart Radio recently staked its claim to remain “Guaranteed Human,” Disney has signaled in no uncertain terms that it plans to become an AI-production company. And if history is any guide, where Disney goes, the rest of the industry usually follows, and that’s exactly why so many AI refuseniks are unsettled by this new development.
Meanwhile, SAG-AFTRA, the union representing film and TV performers, has already weighed in on the deal. “We acknowledge Disney’s and OpenAI’s independent outreaches to us on this matter and their assurances that they will meet their contractual and legal obligations to performers and continue to implement systems to ensure ethical and responsible use of this technology,” the union said in a statement issued yesterday. However, the Writers Guild of America (WGA) was not as polite in its response to the deal. “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 union’s organizing council said in a statement.
These rumblings probably hint at the tenor of the negotiations in the next six months as human actors and writers attempt to mount a defense against the obsolescence and efficiencies being promised to studios that embrace AI, as Disney has in a way that outpaces any other Hollywood studio to date.