Disney is investing $1 billion in OpenAI and is giving the go-ahead for its iconic characters like Mickey Mouse to be used in the AI short-form video app Sora. The two companies announced a three-year deal that would bring more than 200 characters to Sora with a period of exclusivity for part of the duration of the deal.

Disney CEO Bob Iger told CNBC that the partnership with OpenAI values creativity and keeps creators safe from replacement while giving fans new opportunities for creativity.

The inevitable part is that Disney CEO Bob Iger hinted several weeks ago something like this was coming, and most smart money had it involving OpenAI; the kind of social virality Iger suggested fit squarely with what OpenAI has been good at with the likes of Sora and ChatGPT.

"We'd rather participate in the rather dramatic growth, rather than just watching it happen and essentially being disrupted by it," Iger told CNBC.

Disney faces an engagement problem as kids gravitate to YouTube. It's looking to OpenAI to help boost engagement.

The CEO suggested that Disney would prefer Paramount to prevail in the battle for Warner Bros. Discovery, citing Netflix's streaming dominance and the perilous state of movie theaters.

In October 2005, Bob Iger was just a few months into his new gig as CEO of the Walt Disney Company when he announced a deal that would stun the entertainment industry. Standing next to Steve Jobs on a stage in Cupertino, Iger said that Disney would begin ...