The streaming giant Disney has announced earlier this week a $1bn equity investment in the AI prodigy OpenAI, becoming the latest colossus to jump on the artificial intelligence bandwagon.
OpenAI’s video generation engine, Sora, raised eyebrows since its launch in December of 2024 and has amassed a large audience, not only from end-users, but also from animation creators, as the AI tool simply converts and transforms simple text descriptions into, almost lifelike, ultra-realistic short-form video clips.
According to OpenAI, the goal of Sora is to make video creation easy and fast for anyone, without needing cameras, actors, or editing skills. The pioneer built the tool as a step towards an AI that understands the real world better, useful for marketing ads, educational lessons, entertainment effects, or training other AIs with simulated scenarios. And this is where Disney sees immense value.
CEO Bob Iger signalled management’s aggressive push into AI-enabled content creation, and his vision is to create an endless stream of short-form advertising content of the company’s characters, not only maintain existing fans engaged, but also to capture the attention of those on the sidelines.
Thus, Disney is reportedly seeking to create licence deals for over 200 beloved characters that fans eagerly keeping tabs on, from the Star Wars and Marvel franchises, but also from the traditional, in-house Disney figures such as Mikey Mouse, Buzz light Year, Stitch, Alladin, alongside all the iconic princesses.
Now markets watch carefully what kind of content will the company push outwards (since over the years it has received harsh criticism from die-hard fans for its woke-esque character alterations) and quantifying how costly this venture will be. For the time being markets are sceptical about the move but nevertheless, the prospect for new monetization avenues across Disney Entertainment and Disney+ are seen with a positive eye.
Disney (DIS) stock currently floats near the $112 range in the premarket session, has virtually gained no ground since the start of the year and is trading -36% lower over the last 5-year period.
Technical Analysis
Disney Chart – Disney challenges the upper bound of descending channel after OpenAI partnership announcement
Resistance: 117 (R1), 124 (R2), 133 (R3)
Support: 102 (S1), 96 (S2), 89 (S3)