Motley Fool Money – Did Disney Win or Lose the OpenAI Deal?

Date: December 12, 2025
Host: Travis Hoyam
Analysts: Dan Kaplinger, John Quast

Episode Overview

This episode dives into Disney’s headline-making AI partnership with OpenAI, exploring whether this is a savvy move to modernize its business or a risky step that could dilute its valuable intellectual property. The team also covers Oracle’s rollercoaster AI investment story, plays a free-agency game with notable CEOs, reviews Lululemon’s latest earnings, and wraps up with two stocks for investors’ radars.

Disney & OpenAI: Strategic Partnership or IP Gamble?

[00:38 - 11:59]

Disney’s Deal with OpenAI

• Background: Disney and OpenAI have joined forces to allow users of OpenAI's Sora video tool to generate short videos using over 200 Disney characters, with Disney investing $1 billion in OpenAI.
• Initial Reaction:
  • Travis (host) highlights the viral, family-friendly appeal of this technology.
  • Dan expects a viral short-term buzz:

    “It’s going to go viral, you’re going to see a whole bunch of stuff, it’s going to catch fire for at least a period of time.” (01:53 - Dan)

Is Disney Taking Too Big a Risk?

• John’s Skeptical Take:

  • Concerns about Diluting IP:

    “Disney has some of the best intellectual property in the world and this feels like it cheapens it to a degree.” (02:32 - John)

  • Historical Context: References how Disney previously protected its IP fiercely, refusing to license Star Wars for "Ready Player One."
  • Value Question: Wonders if Disney will really get $1B in value back from the deal:

    “Is it going to get $1 billion back in value?” (03:50 - John)

• Potential Upsides:

  • Disney+ Tie-In: There’s a possibility for user-generated videos with Disney characters to stream on Disney+, potentially becoming a new YouTube Shorts competitor.
  • Buzz Creation: Travis notes this could foster viral buzz and brand engagement, especially around new Disney releases:

    “If there’s suddenly videos of my kids... hanging out with the Zootopia characters... that’s the kind of thing that you could potentially create.” (05:02 - Travis)

Brand Control and Quality Questions

• John Doubles Down: Remains wary about whether buzz from AI-generated content is the right fit for Disney’s brand:

  “Does it actually create long term excitement or is it just... a novelty in the short run...?” (06:16 - John)

• Dan’s “GoPro Parallel” Warning:

  • Cautions against assuming Disney can automatically monetize user-generated content:

    “If Disney’s going to do something, it needs to do a much better job obviously than GoPro did.” (06:59 - Dan)

Is This a YouTube Competitor Move?

• Travis Pushes Strategy Angle: Wonders if Disney is using AI videos to stay relevant in user-generated content, challenging YouTube’s dominance.
• Dan’s Take:
  • Believes Disney could be looking ahead, as they did by launching Disney+, but the company is moving cautiously.

  “I do think it’s in the realm of possibility Disney is looking even further forward here with this user generated content.” (08:27 - Dan)

The Industry Impact

• John & Travis: Wonder if other major IP owners (e.g., Nintendo, Universal) will follow or hold out, potentially impacting the competitive landscape.

The Google/Gemini Angle

• Same-Day Cease and Desist:
  • Travis notes Disney also sent a cease-and-desist to Google regarding the Gemini model using Disney characters, underlining Disney's selective licensing efforts.
  • John:

    “For sure, because in OpenAI, it’s now an investor, and so it does have a vested interest in seeing the success of one versus the other.” (11:33 - John)

Key Memorable Quote:

“Disney has some of the best intellectual property in the world and this feels like it cheapens it to a degree.” (02:32 - John)

Oracle and the AI Reality Check

[13:41 - 19:51]

Oracle’s AI Stock Rollercoaster

• Context:
  • In September, Oracle stock soared 40% after a $300 billion AI deal with OpenAI; since then, the stock has dropped 41%.

Investor Doubts about AI Spending

• Dan:

  • Initial excitement is often followed by skepticism:

    “When a big tech company announces an AI investment up front, investors get excited... But then as time goes by and companies actually start paying out the cash... investors now start to seem like they’re getting a little bit worried.” (14:08 - Dan)

• Travis:

  • Frames it as “Buy the news, sell the worries.” (15:09 - Travis)

The Numbers Behind The News

• John:
  • Points to remarkable contract growth:

    “$523 billion in remaining performance obligations for Oracle... up 438%. All of that came from the last quarter, the deal with OpenAI...” (15:53 - John)

  • Notes that only 10% is expected within the next year; most is longer term.

Debt, Costs, and Warnings

• Travis:
  • Highlights Oracle’s over $100B debt and questions if it can fund all the upfront capex for AI.
• Dan:
  • Interest rates on Oracle’s debt are approaching crisis-era highs, potentially threatening its investment-grade rating:

    “It is the highest for Oracle since the financial crisis in 2009.” (17:52 - Dan)

  • If AI cash flow doesn’t come quickly, refinancing could get dicey:

    “It’s a slow boil until something breaks. And when something breaks, everybody’s going to look at everybody else and, and say, oh boy, that’s starting to show cracks as well.” (20:16 - Dan)

CEO Free Agency: Dream Leaders for Iconic Companies

[21:48 - 32:26]

Nike: Who Can Fix the Swoosh?

• Dan:
  • Picks Mark Cuban:

    “He understands how the sports industry works... could add some spice to Nike’s business.” (22:42 - Dan)

  • Would offer him ownership in the Dallas Mavericks if Nike buys them back.
• John:
  • Chooses Shaquille O’Neal, citing his business acumen and name recognition.

    “He just brings that name recognition. But he’s also a good businessman.” (23:55 - John)

  • Would offer him control over inspiring the next athlete generation.

The Trade Desk: Recharging AI

• John:
  • Would (if possible) recruit Rick Smith, an AI expert now CEO at Okta, wanting someone with a strong AI and tech background.
• Dan:
  • Highlights internal candidate Samantha Jacobson as a realistic successor.

    “She’s made smart strategic investments and I think really Jeff Green as CEO needs to make a move that inspires confidence.” (25:55 - Dan)

Disney: Who’s After Bob Iger?

• Dan:
  • Suggests poaching Greg Peters from Netflix to beef up Disney’s streaming and tech side.
• John:
  • Offers up Jeffrey Katzenberg, ex-Disney and DreamWorks founder, with full creative control.

    “You need someone who understands good storytelling. And I think that Disney’s forgotten this.” (28:34 - John)

Square/Block: Vision Reboot Needed

• John:
  • Proposes Elon Musk for his vision and storytelling—even if it means integrating Block into his empire:

    “Nobody can tell a bigger, long term vision than Elon Musk. And that’s what this company needs.” (30:39 - John)

• Dan:
  • Suggests (tongue-in-cheek) Federal Reserve Chair Jerome Powell, citing his macro and regulatory expertise.

Quick Hit: Lululemon’s Earnings

[35:00 - 39:24]

• Leadership Change: CEO Calvin McDonald stepping down, and the stock jumped on the news.

  “Investors are kind of tired of CEO Calvin McDonald. McDonald announced that he would be stepping down. The stock immediately moved higher.” (35:00 - Dan)

• Financials: Modest international growth, struggling North American comps, but healthy profits and a big share buyback.
• Valuation:
  • PE of 13 trailing, 15 forward.
  • John: “In my view, Lululemon is just a brand taking a breather. It’s not a brand that’s in material decline.” (38:03 - John)
• Shareholder Sentiment: Cautious optimism—but recovery could be slow.

Stocks on the Radar

[39:32 - 42:21]

1. Sprouts Farmers Market (SFM) – John Quast

• Down 50% in 2025 but still showing double-digit top-line growth with fewer than 500 locations.
• Returns on invested capital have improved; share count down by a third in 10 years.
• “As they’re investing in new stores, this is adding to the profits of the company.” (40:33 - John)
• Is positioned as a smaller, potentially nimbler player versus Whole Foods.

2. Dollar Tree (DLTR) – Dan Kaplinger

• Dollar Tree thrived in the 2022 bear market, struggled since, but is now regaining momentum as consumers hunt for deals amid persistent inflation.
• “That’s why I’m liking Dollar Tree right now.” (41:08 - Dan)

Host Dan Boyd: Picks Dollar Tree as the favorite, but notes strong cases for both.

Notable Quotes & Moments

• John Quast on Disney’s AI partnership:

  “Disney has some of the best intellectual property in the world and this feels like it cheapens it to a degree.” (02:32)

• Dan Kaplinger, on tech’s AI spending:

  “We used to look at tech raising debt as just kind of for fun because they had huge amounts of cash...” (17:40)

• Travis Hoyam, on Lululemon valuation:

  “Even after the bounce in the stock, the price earnings multiple on a trailing basis is about 13. On a forward basis, it’s about 15.” (37:18)

• John Quast, on Lululemon’s outlook:

  “Lululemon is just a brand taking a breather... Hold it for the long term patiently and chances are your returns will be pretty good because it is at such a good price today.” (38:03)

Timestamps for Important Segments

• [00:38] – Disney & OpenAI partnership analysis
• [02:32] – Concerns over Disney cheapening IP
• [04:39] – Potential for streaming user-generated content on Disney+
• [06:59] – GoPro comparison and monetization risk
• [08:47] – Disney’s user-generated content strategy vis-à-vis YouTube
• [13:41] – Oracle’s AI investment and stock performance
• [15:53] – Oracle’s $523B in performance obligations
• [17:40] – Oracle’s debt and credit risk
• [21:48] – CEO Free Agency game
• [35:00] – Lululemon earnings and leadership shakeup
• [39:32] – Stocks on the Radar: SFM and DLTR

Episode Tone

Engaging and conversational with friendly debate, some playful hypotheticals, and pointed business analysis. The analysts maintain a blend of long-term investing perspective and critical skepticism, while Travis keeps the show moving with strategic questions and light humor.

For investors and Disney fans alike, this episode asks: Is opening the Disney vault to AI a leap forward or a step too far?