The Walt Disney Company and OpenAI have reached a landmark agreement, making Disney the first major content licensing partner for Sora, OpenAI’s generative AI video platform. The partnership, valued at a $1 billion equity investment from Disney, will fundamentally reshape the role of AI in the entertainment industry.

The three-year licensing agreement will enable Sora to create user-prompted, short-form social videos, drawing on a massive catalog of over 200 iconic characters and assets from Disney, Marvel, Pixar, and Star Wars—including Mickey Mouse, Darth Vader, and characters from Frozen and Toy Story. The agreement specifically excludes the use of any talent likenesses or voices.

This transaction is a dual bet for Disney:

1. Content Licensing: It brings Disney’s extensive, highly protected intellectual property into the generative AI arena, with select fan-inspired Sora videos slated to stream on Disney+.
   
2. Strategic Investment & Usage: Disney will make a $1 billion equity investment in OpenAI, receiving warrants for additional equity. Furthermore, Disney will become a major OpenAI customer, deploying its APIs to build new tools and experiences, including for Disney+, and integrating ChatGPT for employee use.

“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,” said Robert A. Iger, CEO, The Walt Disney Company.

Both companies reaffirmed their shared commitment to establishing meaningful industry standards for the responsible use of AI, emphasizing the protection of user safety and the rights of creators. This agreement marks a pivotal strategic shift for Disney, positioning the company as a leader in harnessing generative technology while mitigating the associated risks to intellectual property.

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Disney has announced plans that set the stage for the end of standalone Hulu. The service will instead be “fully” integrated into Disney+, both in the US and globally.

Hulu has been around for over a decade, being one of the first major streaming offerings. Disney has since taken the reins, and last year rolled out Hulu integration into the main Disney+ app for subscribers who bundle the two services. In 2026, this integration seems to go a step further, with Hulu’s standalone app going away.

As part of its latest earnings call, Disney says it plans to fully merge Hulu into Disney+, eventually leading to just one streaming app. Disney explains:

This will create an impressive entertainment package, pairing the highest-caliber brands and franchises, great general entertainment, family programming, news, and industry-leading live sports content in a single app. By creating a truly differentiated streaming offering, we will be providing subscribers tremendous choice, convenience, quality, and enhanced personalization.

All of this work will culminate with the unified Disney+ and Hulu streaming app experience that will be available to consumers next year.

The other big news for Hulu is that, outside of the US, the Hulu name will replace “Star.”

Disney also teases “numerous improvements within the Disney+ app, including exciting new features and a more personalized homepage.”

Meanwhile, Disney is also introducing a new ESPN streaming app. This direct-to-consumer service will provide ESPN’s content without a traditional cable subscription. This new service will launch on August 21, as ESPN will acquire the NFL Network starting with the 2025 season.

Designed to give fans more choice and flexibility, ESPN DTC will offer two plans, including an unlimited plan for $29.99/month that gives fans access to all of ESPN’s linear networks – ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ESPN Deportes – in addition to ESPN on ABC, ESPN+, ESPN3, SECN+, and ACCNX, covering 47,000 live events each year, on-demand replays, studio shows, original programming, and more. Bundling opportunities for the ESPN unlimited plan with Disney+ and Hulu include a special offer at launch for $29.99/month for the first 12 months.

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