IP Bloodsport Goes Prime Time as Disney and Universal Sue $300 Million AI Juggernaut

“F’around and find out” - Mickey Mouse

In case you missed it, Disney and Universal just teamed up to make sure Midjourney (the AI image creator responsible for introducing basement discord dwellers to AI boobs) gets a crash course in “don’t f*ck with the mouse.” 

(Source: Giphy) 

In short, the studios allege that Midjourney didn’t just train its billion-dollar image generator on Mickey, Marge Simpson, and an entire galaxy of copyrighted characters… it’s also been churning out knockoff Star Wars droids, Despicable Me minions, Toy Story stuff, Shrek, The Avengers, and “dozens” of other franchises like a factory stuck in ‘illegal remix’ mode. The legal complaint calls Midjourney a “bottomless pit of plagiarism”. 

However, the numbers are the real sore thumb here. Midjourney raked in $300 million last year. That’s millions of subscribers paying for the privilege of generating Mickey Mouse as a cyberpunk warlord or Homer Simpson starring in Fifty Shades of Grey, and apparently, Midjourney’s compliance team just threw all those cease-and-desist letters straight into the recycling bin. Disney and Universal claim they sent formal demands for Midjourney to knock it off; Midjourney’s only answer was to “review” the matter and then immediately keep pumping out infringement like it was a suggestion.

(Source: CNBC) 

For investors, this is a BFD, because this is the first time Hollywood’s top IP hoarders have tag-teamed to smack a generative AI company upside the head with the full weight of U.S. copyright law. Which is quite hilarious considering these two studios have spent the last decade suing each other over which shade of blue is “trademarked.” Now they’re holding hands in federal court to shoot a shot across the bow for every other LLM or AI outfit built on the “ask forgiveness, not permission” model. Why? Because copyright is the actual business model for these studios.

As NBCUniversal’s Kimberly Harris said, “Creativity is the cornerstone of our business”. Translation: They are going to napalm anyone who threatens their licensing fees. Meaning, if the studios win, generative AI companies will have to start licensing content like actual adults, or risk getting their funding term sheets wrapped around a court summons. 

(Source: Giphy) 

Meanwhile, Wall Street’s reading this as the canary in the copyright coal mine. If Disney/Universal set a precedent, investors will start shorting any company whose business model is “regurgitate famous IP, hope no one notices.” (Sup, Google VEO). If Midjourney weasels out, there’s a gold rush coming for every startup with a GPU and a vague sense of plausible deniability. The risk is existential for both sides, and the legal fees alone will probably fund another “woke” flop nobody asked for. 

In the end, this is definitely a case to keep your eyes on… because this is yet another example of the risks AI poses to corporations (outside of the ones full of employees asking ChatGPT how to quit their jobs). But alas, that’s where we are at now. And while nothing is set and stone other than the initial complaint… I’d expect fireworks from this one. Meaning, keep your head on a swivel and place your bets accordingly. Until next time, friends…

At the time of publishing, Stocks.News holds positions in Disney, and Google as mentioned in the article.