The Hollywood vs. AI battle is heating up, as OpenAI and studios clash over copyright and approval

A year after tech company OpenAI upset Hollywood with the release of its Sora AI video tool, CEO Sam Altman is back — with a potentially groundbreaking update.

Unlike the generic images that Sora was initially able to create, the new software allows users to upload video clips of real people and place them in AI-generated environments, complete with sound effects and dialogue.

In one video, Michael Jackson takes a selfie video with “Breaking Bad” star Bryan Cranston. In another photo, a SpongeBob SquarePants likeness is seen speaking from behind the desk of the Oval Office of the White House.

“Excited for the launch of Sora 2!” “Video modeling has come a long way, and this is a tremendous research achievement,” Altman wrote on social media platform X on September 30.

But this enthusiasm was not shared in Hollywood, where new artificial intelligence tools quickly generated a backlash. The crux of the dispute is who controls copyrighted images and licensed likenesses of actors and characters — and how much should be compensated for their use in AI models.

Motion Picture Association. The business group did not mince words.

“OpenAI needs to take immediate and decisive action to address this issue,” Chairman Charles Rifkin said in a statement Monday. “Well-established copyright law protects the rights of creators and applies here.”

By the end of the week, several agencies and unions, including SAG-AFTRA, responded with similar statements, marking a rare moment of consensus in Hollywood and putting OpenAI on the defensive.

“We are engaging directly with studios and rights holders, listening to feedback, and learning from how people are using Sora 2,” Varun Shetty, OpenAI’s vice president of media partnerships, said in a statement. “Many are creating original videos and are excited to interact with their favorite characters, which we see as an opportunity for rights holders to connect with fans and share that creativity.”

For now, the skirmishes between well-capitalized OpenAI and major Hollywood studios and agencies appear to be just the beginning of a bruising legal battle that could shape the future of AI use in entertainment.

“The question is not whether studios will try to assert themselves, but when and how,” Anthony Glukhov, a senior associate at the law firm Ramo, said of the tussle between Silicon Valley and Hollywood over artificial intelligence. “They can pose whatever they want, but at the end of the day, it’s going to be two giants fighting.”

Before becoming the wrath of the creative community, OpenAI quietly tried to make inroads into film and television.

Company executives went on a charm offensive last year. They have reached out to major players in the entertainment industry — including The Walt Disney Company — about potential areas of collaboration and trying to allay concerns about its technology.

This year, the San Francisco-based AI startup took a more assertive approach.

Before revealing Sora 2 to the general public, OpenAI executives held conversations with some studios and talent agencies, telling them they needed to explicitly announce which parts of the intellectual property — including licensed characters — they opted out of portraying their images on the AI ​​platform, according to two sources familiar with the matter who were not authorized to comment. The actors will be included in Sora 2 unless they opt out, the people said.

OpenAI disputes this claim and says the company’s intention was always to give actors and other public figures control over how their images are used.

The response was immediate.

Beverly Hills talent agency WME, which represents stars such as Michael B. Jordan and Oprah Winfrey, told OpenAI that its actions were unacceptable, and that all of its clients would withdraw.

Creative Artists Agency and United Talent Agency also argued that their clients have the right to control their likenesses and receive compensation for them.

Studios, including Warner Bros., have echoed that point.

Warner Bros. said: Discovery said in a statement: “Decades of enforceable copyright law stipulate that content owners do not need to ‘opt out’ to prevent infringement of their protected intellectual property rights.” “As technology advances and platforms evolve, the traditional principles of copyright protection do not change.”

Unions, including SAG-AFTRA — whose members were already concerned about the recent appearance of a fake AI-generated composite called Tilly Norwood — also expressed concern.

“OpenAI’s decision to honor copyright only through an ‘opt-out’ model threatens the economic foundation of our entire industry and highlights the risks in the litigation currently running through the courts,” newly elected President Sean Astin and National CEO Duncan Crabtree-Ireland said in a statement.

This conflict highlights the clash between two very different cultures. On the one hand there is the reckless Silicon Valley ethos of “move fast and break things,” where asking for forgiveness is seen as better than asking for permission. On the other hand is Hollywood’s eternal wariness of the impact of new technology, and its desire to retain control of increasingly valuable intellectual property rights.

“The difficulty, as we’ve seen, is balancing prior capabilities and rights that other people have,” said Rob Rosenberg, a partner at the law firm Moses and Singer LLP and former general counsel of Showtime Networks. “This is what was driving the entire entertainment industry crazy.”

Amid the outcry, Sam Altman posted on his blog days after Sora 2’s release that the company would give more granular controls to rights holders and was working on finding a way to compensate them for video creation.

OpenAI said it has guardrails to prevent the generation of well-known personalities and a team of reviewers who remove material that doesn’t follow its updated policy. Rights holders can also request removal of content.

Legal experts said a strong response from the creative community could be a strategy to force OpenAI to enter into licensing agreements for the content they need.

Current law is clear, the copyright holder has complete control over the copyrighted material, said Ray Seeley, an entertainment attorney at the law firm Kinsella Holly Easer Comp Steinsaber.

“It’s not your job to go around telling other people to stop using it,” he said. “If they use it, they use it at their own risk.”

Disney, Universal and Warner Bros. have previously filed suit. Discovery sued artificial intelligence companies MiniMax and Midjourney, accusing them of copyright infringement.

One challenge is figuring out a way to fairly compensate talent and rights holders. Many people who work in the entertainment industry ecosystem said they don’t think flat fees are feasible.

“Make monetization not one-size-fits-all,” said Dan Neely, CEO of Chicago-based Vermilio, which works with talent and Hollywood studios and protects how their likenesses and personalities are used in AI. “This is what will move the needle for talent and studios.”

Visiting journalist Nilesh Christopher contributed to this report.