Disney's Billion-Dollar Bet on OpenAI

Jaden, Disney is taking sides. Have you seen this story, right? Like they are choosing OpenAI over Google. It's absolutely fascinating. Disney's investing a billion dollars in OpenAI. By the way, when you hear a billion dollars, I am always so curious. Is that going to sound like nothing in like two years or is it going to sound like this is overblown? But it's anyway, giving OpenAI a three-year license to use more than 200 Disney, Pixar, Marvel and Star Wars characters in Sora and ChatGPT while becoming a major open AI customer for AI tools across Disney Plus and internal workflows. Okay, so the exciting thing to me, Jane, is not just now that you can actually crank out legally these characters, and I'm going to feel just a lot better about it as a creator myself, but the interesting thing is that they simultaneously hit Google with a cease and desist. They have chosen sides, and it's absolutely fascinating, and just like lead some much, much bigger questions about all the knowledge that this is trained on, hard rails that are put in place, et cetera. I know you were talking about this, Jaden. What are we using on this story? Because this is a cool one. This is a masterclass from Google and OpenAI, or sorry, from Disney and OpenAI. There's two cool things here that's happening. The first one is the Disney OpenAI deal, right? Disney is going to give them a billion dollars for, is this an equity investment in OpenAI? So they're getting equity. They're giving them a billion dollars. They're doing a separate thing, which is that they are signing that three-year partnership with OpenAI. They're going to bring their characters to the company's OpenAI video generator. Not a lot of details on that, but something that theoretically is an interesting concept here is what if Disney says, let's sign the $300 million deal. You give us $300 million. You can license our stuff. Oh, also, we're going to give you a billion dollars for equity. Basically, we're doing the money round trip. And I just think Sam Altman is the ultimate king. He's done this with everyone in the entire world in, you know, in the chip space and in the data center space. Why not start doing it with like licensing people? Why doesn't he now he's going to go to the Wall Street Journal and get, you know, a billion dollar equity investment? Because when you have someone like doing a deal like that, where it's like, you know, theoretically, I don't know all the terms of the licensing deal. But let's just say it's 300 million or 100 million. Well, probably 300 is probably 100 million a year for, you know, three years. I guess like, look, let's look at Reddit, right? Google's paying Reddit $100 million a year to license their data for training their model. So you could guess maybe there's some sort of deal similar to that. But it's like when you're giving them money and they're giving you money back and then you're trading for equity, a couple of good things are happening here. Number one, these deals are pretty relaxed and not relaxed, but it's a little bit, there's a lot more leeway essentially for OpenAI to keep their valuation really high while they raise money. So they're like, look, we just keep getting money. Google just gave us or Disney just gave us a billion dollars. People just keep giving us billions and billions of dollars at higher and higher valuations. And they're doing these clever deals. But like this isn't new either. They've been doing that with NVIDIA as well. NVIDIA gave them a hundred million dollars not too long ago. And it was the same kind of thing. You know, they're constantly giving NVIDIA money and NVIDIA is giving them back money and buying equity. So I think this is a really smart really smart move But then we pair it and we start talking about the the cleverness of Disney in this is in the sense that Disney has now just hit Google with a cease and desist claiming quote unquote massive copyright infringement. So Disney not only is making this kind of clever deal with OpenAI, whatever, but at the same time, they're carrot and sticking. They're going over to Google, whacking them and saying, hey, you guys are doing all this, you know, massive copyright infringement, cease and desist, you should sign a $300 million deal with us like we just signed with OpenAI. So anyways, I think this is smart because OpenAI obviously has their incentives for pulling in the money and roundhousing the money. And Google has an incentive to do something like that, because now that they've made this deal with OpenAI, they can go to every other AI company, Anthropic, Google, Grok, and say, look, like we just, OpenAI is paying us this much money for the licensing. You guys should do it too, because otherwise we're going to sue you for getting our characters involved in all of your stuff, which everyone probably is in some way. Yeah, it's, you know, I don't know how to feel about any of this, right? Because it's really the the Writers Guild of America absolutely crushed this deal. They were saying like, OK, so basically you said, well, I guess they stole the money and now we can, you know, like now let's get in get in bed with the with the bank robbers or whatever, that kind of thing there's. But also there's so many models that will just do this illegally. So that's number one. And so I'm wondering, and I don't know enough about this world to know what Disney is looking to do here. I mean, because I'm guessing that there's guardrails. Like you can't have, you know, Mickey Mouse doing sort of things that you wouldn't want your kids to see and stuff like that. Or you can't have them like smoke and join. There's probably like a ton of things that you can't do. But when OpenAI has the license to do this, like short-form video, image generation, et cetera, meaning what? Like I get that it can do that. And I get that now we can have like Star Wars characters, all that kind of stuff. And now creators can do that. Is this like the nano banana moment where everybody's like going to now flock over to Sora and, you know, back to ChatGPT? Because those nano banana type moments from Gemini, those are the things that actually spike usage in their apps and things like that. Like it's really, it's a lot of those spikes don't come from the spikes. From my perspective, Jaden, the spikes from Anthropic tend to come from Enterprise and Small Business too that just want to use. code. So that's Anthropics thing. Like they just like are signing amazing partnerships. OpenAI has tons of partnerships. Gemini sort of is more capturing the imagination of the planet when they do some cool things like Notebook LM and Nano Banana. And then Gemini comes out and, you know, and sort of like giant CEOs are like, oh, I've been using, you know, OpenAI this whole time. Now I'm using Gemini, et cetera, et cetera. And they just build Gemini into everything. but this in particular, tell me sort of like what it is that's worth a billion dollars here. Like what is it worth to Disney? What is it worth to OpenAI to just be able to do this? Because people can obviously do this on probably a ton of, you know, Chinese open models and things like that, right? So what is this money going toward, do you think? So, I mean, I think there's a couple things that are happening. For OpenAI, I think it's actually true that this is going to be a a good moment for them a lot of people are going to be able to create characters on chat gpt now because this licensing deal doesn isn just for sore it also for images generated on chat gpt which i kind of tend to think is going to be a bigger deal and i think if you can go and generate all of the disney characters over there and you want to make a kid's coloring book or like anything else it honestly is now basically the most useful model for like a lot of just general people like moms of america rejoice maybe moms of the world rejoice coloring books will now include all of your children's favorite disney characters so i think like there's a lot of like actual generally genuinely useful you cannot do it on any other major models you mentioned the kind of like the chinese models but i just tend to think like that's never going to be used for any serious for anything serious um because random mom making a coloring book with disney characters and it isn't going to be going and finding that random cracked chinese model so i actually think as far as the major models go this is some sort of competitive advantage. Of course, this doesn't include any, like, people. Like, so, like, Marvel, right? Like, it's not going to be any, like, actual actors or actresses. Those are not included in the licensing. It's just, like, the cartoons. So there's also that that kind of is pulled out of it. But overall, I think it's a good deal. And you also have to know that in all of this deal, Disney also did say that they are going to, they signed an enterprise deal as well with OpenAI, where they're going to become an OpenAI user in Disney+, where they're going to pull in a bunch of, they're going to make a bunch of quote unquote new experiences using OpenAI's stuff inside of Disney+. So Netflix is doing a lot of similar things and I think we're going to get more AI into the video making. At the end of the day, I honestly think, well, there's a lot of like benefits, like there's multiple benefits. There's a lot of synergies between these two companies. I think at the end of the day, Disney actually wants $1 billion worth of equity of OpenAI because they see this as a company that is going to continue to eat the world and they want a piece of it. and it will help grow their company and their stock price into the future. I think it's just a smart investment, honestly. I know they're doing the synergies and they're doing other things, but I really think they're just making an investment as well. No, I can see that. And I mean, I think the Netflix thing is an interesting point too, right? Because it's, you know, they are going to be this huge customer now, right? So they're going to be able to use OpenAI APIs and ChatGPT and everything else for their employees, although that's pretty marginal. I mean, OpenAI, like ChatGPT is not that expensive. It's expensive, but it's not a billion dollars expensive. But the idea of using, let's call it sort of like souped up, like either Gen.AI or machine learning, essentially to make like recommendations and creative and product experiences and things like that for Disney Plus, that could be awesome because I think Disney Plus just jumped in subscription fees and things like that as well. And so if they can get creative with ChatGPT, it's fascinating. I guess the thing that I just was, Jaden, it's one of these things where, you know, when you see like Burger King is doing, you know, kind of a thing with Marvel or Iron Man and, you know, on the cut. I always think like, who's paying who there? Do you know what I mean? Like, who is getting the benefit? And I think it's sort of like this exchange. So now I'm sort of seeing, okay, so Disney is actually going to be using OpenAI to really be invested in creating amazing Disney things. Because to your point I mean Disney is infused throughout every household maybe not in the world but certainly in the Western world And I think that that where this deal could really make the most sense It probably like I mean I think it cool that we can now make Disney characters and Star Wars characters and do not underestimate the fervor of the Star Wars fanatic to do this for sure But that not to me a billion dollars, right? And then I keep thinking like, okay, so who are the next ones? Who are the next big cartoons and the next big things that are going to sort of be making these deals? I do think we'll look back and sort of think of this as a pretty big moment in time. Okay, and I have one final piece of the puzzle that I think is going to be interesting. And that is that OpenAI has a very clever way of getting people on their side that will essentially investors into their company that are going to be that they want to be invested in their growth. So bringing Disney on and giving Disney like a billion dollar equity package and then working heavily with Disney, they know that Disney can essentially boost their stock price and their overall valuation in a lot more ways than just some of the deals that they're making. So an example of this is, and I think Disney also is like planning on using a lot of open AI or some sort of AI model to do a big project. And they're like, well, let's just get an investment in this because we know we're going to boost that entire company as well. And the way that I think this is going to happen, it's going to happen with Netflix as well. It's kind of already rumored about it, but we don't know too many details. And Disney is going to no doubt do this as well. I think you're going to be on the Disney Plus platform. They said like new experiences, quote unquote, they haven't elaborated a lot but they're specifically interested in Sora I would not be shocked in fact I fully anticipate OpenAI Sora products so AI generated videos to be embedded as a feature inside of Disney Plus where your kid could probably watch a show and at some point will be able to say you know create like a little mini clip of after the show of Lilo and Stitch chatting about XYZ thing or talking to me or let me interact with Lilo and Stitch in like this sort of way. They'll they're 100 percent going to make interactive video experiences. Maybe it's not going to be the place where you can create an entire new Lilo and Stitch movie or something. But I think you're going to make a lot of interactive experiences that are going to use a lot of compute. It's going to be like an entertainment platform. It's going to be very immersive. Disney is probably looking at this or quite an innovative company. If you look at their their innovation labs, I think they like this is on the roadmap and they're like, we will boost one of these AI companies significantly with our usage. Let's get a piece of them before that happens. So I think this is kind of the precursor to that. Okay, I'm sold. I'm sold. Listen, guys, these are the stories that we love. So thanks for tuning in today. Listen, if you have not yet checked out AIbox.ai, this is the company that Jaden started and just like went through the roof almost instantly. And you're going to understand why instantly, which is it gives you access to all the models for $19 a month. That's what I do all day long. I jump back and forth from model to model to model. I'm spending like tons of money, 19 bucks a month. You just get to do this on AIbox.ai, but you also get to build out your own workflows. This is super fun for non-coders. Like I'm a non-coder. It's just unbelievably easy to use. Check it out. Get it for somebody for Christmas. 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