OpenAI’s Sora Filmmaking Tool Meets Resistance In Hollywood

(Bloomberg) -- Newspaper publishers have licensed articles for millions of dollars. Record labels have filed lawsuits. But when it comes to the commercial potential of artificial intelligence, movie studios are off to a much slower start.

OpenAI has spent months talking to the industry's largest studios, including Walt Disney Co., Comcast Corp.'s Universal Pictures and Warner Bros. Discovery Inc., about the creative and commercial potential of Sora, according to people familiar with the discussions. OpenAI has discussed creating a tailored version of the AI tool for a studio to use on its own projects, said the people, who declined to be identified discussing confidential conversations.

Yet those talks have yet to produce any deals. Studios are reluctant to get into business with an AI company, wary of how it might use their data and of angering the labor unions with which they work every day. Concerns about the use of artificial intelligence were one of the biggest factors in two labor strikes that paralyzed Hollywood in 2023. Both screenwriters and actors have continued to urge Hollywood studios to police tech companies and ensure their work isn't being used illegally.

OpenAI, the $157 billion operation behind ChatGPT, first unveiled Sora in early 2024, attempting to keep pace with a growing number of tech startups that offer tools to help users generate realistic-looking video clips from text prompts. Not long after that, OpenAI executives, including Chief Executive Officer Sam Altman, visited Los Angeles to attend some Hollywood events. They met with film studios, media executives and talent agencies to demonstrate the technology.

OpenAI has said it may be premature to rush into commercial partnerships for the product.

“We're so early with Sora,” Brad Lightcap, OpenAI's chief operating officer, said at a conference in January. “I think part of getting these things right is you can't just say, ‘Okay, we have a model, now we're going to force a partnership.” The company is engaged with the industry, he said, adding that “their feedback is super valuable.”

OpenAI has found a receptive audience among some filmmakers who have been happy to experiment with the product as a creative tool.

AI is “going to disintermediate the more laborious, less creative and more costly aspects of filmmaking,” actor and director Ben Affleck said in a TV interview last year. Affleck cautioned that AI wouldn't replace filmmaking or screen writing.

The conversations with studios have been more complicated. Studios recognize AI is already changing how people work and they don't want to be left behind. Many film executives share Affleck's belief that AI will reduce the costs of animation and visual effects.

Yet having watched Alphabet Inc.'s Google, Meta Platforms Inc. and Netflix Inc. take their viewers and advertisers — often while using their content — film studios are reluctant to hand over their most valuable assets to another large tech firm without receiving a significant payout. Unlike record labels, which made billions by taking equity in Spotify Technology SA, the big studios never invested in newer distributors like YouTube or Netflix.

The one exception so far is Lionsgate, a mid-sized studio that in September struck a deal with AI startup Runway to train a new artificial intelligence model on the entertainment company's catalog. Lionsgate will be able to use the technology to generate video for its own future projects.

“Several of our filmmakers are already excited about its potential applications to their pre-production and post-production process,” Lionsgate Vice Chair Michael Burns said in a statement at the time. “We view AI as a great tool for augmenting, enhancing and supplementing our current operations.”

Some studios have discussed a similar deal with OpenAI whereby they would train a bespoke version of Sora on its characters purely for internal use. The arrangement would let Disney or Warner Bros. use AI during production, but not allow the average user to put Snow White or Batman in their videos.

Some studios have also discussed the possibility of licensing their catalogs of movies and TV shows to OpenAI, deals that could be worth millions and avoid messy copyright battles. Yet those talks were nascent and haven't progressed.

The studios and OpenAI have not settled on a deal framework that would work for both sides financially. It's also not yet clear how a studio would share any proceeds with filmmakers or actors who are entitled to a share of profits from a project.