This Week in Startups – Episode E2223: “Disney and OpenAI sign landmark deal… and we saw it coming!”

Host: Jason Calacanis
Guests: Alex Wilhelm, Lon Harris
Date: December 13, 2025

Episode Overview

This episode dives deep into the historic Disney–OpenAI partnership, exploring its industry-shaking implications for IP, licensing, and the future of AI-generated content. Jason and his guests dissect the deal from legal, business, creator, and cultural angles, discuss its precedents for lawsuits and future deals, and explore related topics including AI’s impact on labor, policy moves, and M&A in tech.

Key Discussion Points & Insights

1. Disney & OpenAI Partnership: Anatomy of a Landmark Deal

• Deal Details

  • Disney is investing $1 billion in OpenAI, with warrants for future equity and a 3-year agreement for OpenAI to use a select portfolio (~200) of Disney, Marvel, Pixar, and Star Wars characters inside its Sora platform.
    Jason (00:00, 02:16): “Disney is going to invest $1 billion into OpenAI. It’s going to have warrants for future purchases. It’s going to be a three year deal to use certain Disney IP inside of Sora. And I think this is a big damn deal.”
  • One year of exclusivity; no similar deals for Disney IP with others in the near term.

• Formalizing IP Collaboration

  • Lon Harris explains this is the first real codification of what AI–IP owner deals look like. Those not included are explicitly shut out, as shown by Disney’s cease and desist to Google right before the OpenAI announcement.
    Lon (02:30): “If you’re not part of one of these deals… you cannot use these IP. So it’s the first attempt to formalize this whole process.”

• Litigation & Precedent

  • The commercial arrangement gives new ammunition to lawsuits (e.g., NYT v. OpenAI, Disney v. Google) that argue there’s measurable value in IP used by AI — and therefore, a real cost to “stealing” content.
    Jason (03:39, 07:39): “Now that there’s a commercial relationship, every other lawsuit… will be able to point to this commercial arrangement and say there is a cost to people stealing their content...”
  • The deal “plants the flag” — all generative AI companies will need similar arrangements.
    Jason (07:39): “Every single LLM is going to have to do this.”

• Impact on Competing AI Companies

  • Context: Disney sent Google a cease and desist over alleged copyright infringement for LLM training, putting pressure on other AI players to get their own licensing in place.
    Alex (15:41): “Disney sent a cease and desist letter… (alleging) Google operates a virtual vending machine… capable of reproducing, rendering, and distributing copies of Disney’s copyrighted characters.”

• Industry Prediction

  • Jason predicts a coming wave: 20 new major IP deals in 2026 between LLMs and content owners.
    Jason (11:34): “20 more of these will happen. I’m going to predict it right now.”

2. IP, Creators’ Rights, and the Guardrails Question

• Creator Compensation Concerns

  • Lon raises the long history of Hollywood promising creators a cut—and underdelivering. Will these new AI licenses fairly compensate original artists, or will fees remain minimal?
    Lon (12:02): “Are these license fees going to be… pennies every year… or a meaningful payout to creatives?”

• Employee Contracts & ‘Work for Hire’

  • Jason notes most comic/film creators were full-time employees who signed away claim to ongoing royalties.
    Jason (12:34): “They were full time employees who signed work for hire agreements… an economic decision they made.”

• Guardrails for AI Content Use

  • OpenAI/Disney say no use of human faces or voices (e.g., Kylo Ren’s helmet is fine, but not Adam Driver’s literal likeness or voice). But will technical controls be robust and transparent enough, especially as more types of content get licensed and included?
    Lon (12:44): “We are going to have guardrails… but how effective will they be?”

• Famous Likeness Rights Deals

  • Examples cited: James Earl Jones selling his Darth Vader voice in perpetuity to Disney; Sir Michael Caine’s deal with 11Labs. Artists and estates are beginning to strike their own AI usage bargains.
    Lon (14:11): “Sir Michael Caine’s recent deal with 11Labs… use his voice likeness for whatever projects.”

• Fair Use vs. Licensing

  • Jason distinguishes fair use (criticism/commentary, parodies, etc.) versus full licensing for commercial AI content generation.
    Jason (05:03): “For education or commentary purposes, that’s totally allowed under Fair Use… commentary is protected…”

3. Why This Is a 'Gift' to American IP and the Global Stakes

• Geopolitics and Competing with China
  • Jason argues that respecting IP is a core American value and necessary for global standing rather than just “beating China.” AI companies must support robust IP protections if they want that protection for their own creations worldwide.
    Jason (07:39): “…The American way is to respect IP. Once we lose that, we lose everything.”

4. Business Implications for Big Content & LLMs

• Disney’s Licensable Catalog

  • Disney can now slice and auction pieces of its vast IP portfolio (Pixar, Marvel, etc.) — not just to OpenAI, but to other players, each for their “own” AI.
    Jason (09:42): “Disney should say Pixar is available for your LLM to the highest bidder… Then they should take Marvel characters and go to Claude…”

• Deal Structure Specifics

  • 3-year deal, 1-year exclusivity, warrants for Disney to acquire OpenAI equity.
  • Not open access: only ~200 out of Disney’s far larger catalog are included.

5. Broader Legal and Regulatory Context

• Executive Order on AI

  • The President signed a national AI executive order—trying to centralize regulation and override patchwork state laws, but with carve-outs for issues like child safety, censorship, and creators’ rights.
    Alex (24:43): “The EO demands that we put together a framework for what Congress may or may not pass… It puts pressure on states…”

• The Coming Political Clash

  • The episode predicts AI and automation will dominate the next cycles of US political debate, especially as job loss, immigration, and technological displacement roil the electorate.

6. Society & Culture: AI-Created Content and Its Flaws

• Amazon’s AI Recaps and Dubbing Failures
  • Amazon’s rapid rollout (and subsequent retraction) of AI-based anime dubs and show recaps highlights the current limitations — flat performances, factual mistakes, consumer backlash.
    Lon (20:18): “AI performances were very poor… the AI recaps… full of errors… described one scene as taking place in the 1950s. It was actually 2077.”
  • Jason suggests that for “serious” content, people demand professional quality, but for convenience (e.g., listening to articles with synthetic voices), people are more forgiving and just want the utility.
    Jason (22:54): “For high art… it’s important that it be right. For an article in The New Yorker… if it mispronounces something, I don’t care. I want the convenience.”

7. AI, Labor Market, Immigration & Policy: The Future Socioeconomic Debate

• AI Replacing vs. Empowering Workers

  • Jason notes a shift: today, many startup pitches openly pitch headcount elimination, not just productivity. Debates rage between “accelerarists” (grow as fast as possible) and “decelerarists” (go slow, save jobs). Jason (31:53): “50% of founders say, ‘We’re going to replace … support, pilots, drivers…’ and the administration is avoiding this topic at all costs…”

• Republican Rift: Technologists vs. Populists

  • MAGA movement and tech-backed GOP elements are at odds over AI’s disruption — the tech elite may want national regulation, while populists (Bannon, Vance) argue for worker protection and state autonomy.

• Real Solutions?

  • Jason proposes: Use taxes on robots/robotaxis to fund retraining for displaced workers; focus AI benefits on healthcare, education and housing — “the cost of living will go down…”
    Jason (37:07): “If we solve those three problems, the cost of living will go down so dramatically… people will live longer… AI will do something for every man, every woman in America, every child.”

• Immigration & Labor Tied to Automation

  • Should the US deport more undocumented workers to “raise” pay for citizens as automation rises—or is the reality more nuanced?
    Jason (44:00): “Would you be in favor of deporting more illegal aliens working on farms or as dishwashers in order to reclaim those jobs…?”

8. Practical Advice for Founders Facing Corporate Interest

• Handling Acquisition Interest
  • Take the meeting, but be vague—pump the acquirer for information, don’t overshare your data. Understand the prospective acquirer’s track record and motives—are they more likely to build or buy? Jason (55:23): “You’re not obligated to tell the corporate dev people all the top stuff… You just ask them questions, you collect information… keep them in the dark and feed them shit.”

Notable Quotes & Memorable Moments

• Jason, on historic prediction:
  “It was obvious this would happen and I got lucky by just picking the best IP in the world, Disney’s… that within 100 days it actually happened. I got lucky...” (08:48)

• Lon, on creators’ compensation:
  “We’ve seen this a ton with Marvel movies where all the guys who created these characters… like Steve Ditko’s estate isn’t making millions every time a new Spider-Man movie comes out.” (12:19)

• Jason, on the deal’s precedent:
  “If you got a $500 billion, a trillion dollars company, what’s $1 or $2 billion here to license some content… 30-40% of consumer revenue… should go to content creators...” (05:37)

• Jason, on AI industry’s paradigm shift:
  “Every single IP holder needs to do a deal like this. They need to plant a flag…” (16:41)

• Alex, on acquisition offers:
  “Take the meeting. Don’t be overly specific. That makes good sense to me.” (55:23)

Key Timestamps for Major Segments

• 00:00 – 03:39: Disney–OpenAI partnership details; first-of-its-kind deal structure
• 05:03 – 07:39: Fair Use vs. AI licensing; creator payouts; how the deal sets new legal precedent
• 09:42 – 11:34: Business implications for IP licensing; slicing the Disney portfolio for AI
• 12:02 – 14:56: Creators, compensation, guardrails, Hollywood’s concerns
• 15:10 – 16:41: Legal posture: summary of Disney’s cease and desist to Google
• 24:43 – 28:47: The new AI Executive Order, its framework, and regulatory friction between state & federal
• 29:05 – 34:12: MAGA/tech conservative rift; labor, jobs, and AI in political discourse
• 36:47 – 39:01: Policy proposals for managing automation and job displacement
• 52:08 – 56:08: Advice for founders: responding to M&A interest, negotiating with big corporates

Summary

Jason Calacanis and his guests break down why the Disney–OpenAI partnership is a watershed moment for both AI and the content business—setting legal, economic, and cultural precedents. The deal legitimizes the value of IP in the AI era, pressures other AI firms to establish their own licensing footholds, and opens the door to more creative business models between tech and entertainment giants. Meanwhile, anxieties around creator compensation, labor, regulatory power, and the social impact of AI remain front and center.

With incisive predictions, practical advice for founders, and a close read on the next policy battles, the episode is essential listening for anyone interested in where AI, media, and society are heading in 2026 and beyond.