In a watershed moment for Hollywood and generative artificial intelligence, Disney said Thursday that it would buy a $1 billion stake in OpenAI and bring its characters to Sora, the AI company’s short-form video platform.

A curated selection of videos made with Sora will be available to stream on Disney+ as part of the three-year deal. Disney also said it would work with OpenAI to “build new products, tools and experiences” as part of the agreement and integrate ChatGPT into its workflow.

“The rapid advancement of artificial intelligence marks an important moment for our industry, and through this collaboration with OpenAI we will thoughtfully and responsibly extend the reach of our storytelling,” Disney CEO Robert Iger said in a statement.

Disney is the first major Hollywood company to cross this particular Rubicon. Disney, Universal, Warner Bros. Discovery and the like have spent the past couple of years trying to sort through major concerns about how generative AI software is built, how copyright holders are compensated and how Hollywood unions may react. Disney and Universal are suing Midjourney, an AI image generator that has tens of millions of registered users, for allowing people to create images that “blatantly incorporate and copy” characters owned by the companies. (Midjourney has rejected the claim, saying its actions fall under “fair use.”)

On Wednesday, Disney accused Google of copyright infringement on a “massive scale” in a cease-and-desist letter that was viewed by The New York Times. Disney’s lawyers demanded that Google stop using copyrighted works, including those from “The Lion King” and “Guardians of the Galaxy,” to train and develop generative AI models and services. Disney has sent similar letters to companies like Meta and Character.AI.

Notably, the agreement Disney announced with OpenAI on Thursday did not include any talent likenesses or voices, and Iger — perhaps anticipating pushback in Hollywood’s creative community to the agreement — emphasized that Disney would collaborate “thoughtfully and responsibly” with OpenAI.

“This does not, in any way, represent a threat to creators — in fact, the opposite,” Iger said in a subsequent CNBC interview. “I think it honors them and respects them, in part because there’s a license associated with it.”

He added, “Let’s be mindful of the fact that these are 30-second videos.”

Even so, the partnership with Sora, which is exclusive for the first of its three years, could dilute the carefully controlled stories and quality associated with Disney’s brand. Sora’s users will be able to generate endless videos with Disney characters, albeit with restrictions on what they can do. (No drugs, sex, alcohol or interactions with characters owned by other media companies, for instance.) “Disney’s AI Slop Era Is Here,” was how the tech news site Gizmodo framed the partnership in a headline.

But the popularity of generative AI tools like Sora has forced companies like Disney to come to the table — to try to exert some control over the flood of user-generated videos using its imagery and make money off it. To remain relevant to young audiences, Disney believes it must allow its characters to join the AI revolution. Other traditional media companies could follow.

While Disney’s initial investment in OpenAI is tiny — the startup is valued at more than $500 billion — Disney has the ability to increase its stake as part of the deal. “It gives us an opportunity to play a part in what really is breathtaking, breathtaking growth,” Iger said on CNBC. The deal, which remains subject to approval from Disney’s and OpenAI’s executive boards, was the result of nearly two years of talks between the two companies.

First available to users in February 2024, Sora is a technology that lets people generate photorealistic videos simply by typing a sentence into a box on a computer screen. Similar technology is offered by tech giants Google and Meta, startups like New York-based Runway and many companies in China.

This fall, OpenAI released a consumer version of Sora designed to generate short form videos for social media. More than a million people downloaded it within five days — almost instantly using the app to generate videos that recreated copyrighted material. Rights holders were outraged, even though OpenAI provided a process for them to submit opt-out requests.

Sora users will be able to start generating videos with Disney characters early next year. The characters include Mickey Mouse and characters from “Encanto,” “Frozen,” “Moana,” “Toy Story,” “Zootopia,” “Inside Out” and other animated movies. Animated or illustrated versions of Marvel characters like Deadpool, Iron Man and Black Panther will also be available, along with “Star Wars” characters such as Darth Vader and Yoda.

That means Sora users could make videos of themselves in a lightsaber battle with Luke Skywalker or a happy birthday video using Buzz Lightyear.

“This agreement shows how AI companies and creative leaders can work together responsibly to promote innovation that benefits society” and “helps works reach vast new audiences,” Sam Altman, the CEO of OpenAI, said in a statement.

Although the Sora app spent several weeks at or near the top of the list of the most popular free apps in the Apple App Store, it has since moved down the list. Its popularity has also waned on Android phones.

Later Thursday, Runway mounted a significant challenge to Sora, unveiling technology that exceeds the performance of OpenAI’s video generator, according to standard industry benchmarks. Like OpenAI, Runway sells its technology to filmmakers, video game designers and other professionals in and around Hollywood.