Disney accuses Google of widespread copyright abuse even as it strikes $1 billion AI deal with OpenAI

The Walt Disney Company, fresh off signing a $1 billion licensing agreement with OpenAI to use its characters in AI-generated videos, has opened a new front in its legal battles over artificial intelligence. This week, the entertainment giant sent Google a cease-and-desist letter accusing the tech company of infringing Disney’s copyrights on what it described as a “massive scale.”

As per reports, in the letter, Disney argued that Google's AI systems were “designed to free ride off Disney’s intellectual property,” alleging that Google had refused to adopt readily available safeguards that competitors already use. “Instead, Google continues to directly exploit Disney’s copyrights for commercial gain,” the company wrote.

The dispute comes as Google rolls out Gemini 3, a major overhaul of its AI offerings that includes the latest version of its image-generation model, nano banana pro. The rapid evolution of such tools — capable of producing increasingly realistic images and videos — has sharpened long-standing concerns among copyright owners, who fear their works are being used without permission to train AI systems or to generate imitation content. Disney, one of the world’s most valuable holders of intellectual property, has become a focal point in those debates.

The company contends that Google is using its dominance in search and its ownership of YouTube to “flood the market with infringing works,” according to the letter, profiting from content that closely resembles Disney’s films and characters. Disney said it had raised the issue months earlier but received no meaningful response.

Google, in a statement, pointed to its current partnership with Disney and stressed its use of open-web data and built-in copyright controls across Google and YouTube.

Disney and other studios, including Universal and Warner Bros., have already filed lawsuits against the AI company Midjourney, accusing it of generating images that too closely resemble their protected characters. The new complaint against Google raises similar concerns, citing examples of users generating content that echoes Disney icons such as Darth Vader.

Yet even as Disney presses its legal claims, it is simultaneously deepening its commercial ties with the AI industry. On Thursday, the company unveiled its sweeping three-year agreement with OpenAI, which allows the tech firm to use more than 200 characters from Marvel, Pixar, Star Wars and other franchises in AI images and Sora-generated videos. The pact will also bring ChatGPT tools to Disney employees and select Sora-produced videos to Disney+.

The dual strategy — litigation on one side, licensing on the other — signals how Disney is attempting to assert control over its intellectual property in an era when generative AI is reshaping both the creative process and the economics of entertainment.