Picture this: Hollywood's glittering world of stars, studios, and blockbuster hits suddenly thrust into a high-stakes showdown with a tech powerhouse that's redefining entertainment on its own terms. Sam Altman, the visionary leader of OpenAI, orchestrated a bold move that left the industry reeling—and sparked debates that could reshape creativity forever. But here's where it gets controversial: Was this a clever strategy to push boundaries, or a blatant disregard for rights that could erode the foundations of art and ownership? Stick around, because the twists in this tale reveal how innovation and tradition are clashing in ways most people never see coming.
No one had a clear picture of what was unfolding. It was late September, mere days before OpenAI—a trailblazing AI company—launched a new social media platform tied to its video creation tool called Sora. Rumors were buzzing about shifts that might disadvantage Hollywood's heavyweights. A prominent talent agency, catching wind of these developments through insider chatter, was puzzled why their top executives hadn't been looped in by Sam Altman's team. Frustrated, the agency decided to make the first move and reached out directly.
The initial discussions between the agency and OpenAI were far from smooth. In the words of an agency insider who participated in the intense exchanges, OpenAI representatives came across as 'deliberately evasive.' The tech firm's negotiators maintained an enthusiastic demeanor, repeatedly emphasizing an opt-in framework designed to shield the agency's clients from unauthorized use of their intellectual property and personal images.
To help newcomers understand, an opt-in system means creators or rights holders must explicitly agree for their work or likenesses to be used—think of it like opting into a newsletter where you give permission upfront. Conversely, an opt-out approach assumes consent unless someone specifically objects, which can feel like a default setting that favors the platform. OpenAI's team, including CFO Brad Lightcap, Sora's product leader Rohan Sahai, media partnerships vice president Varun Shetty, and talent partnerships head Anna McKean, reassured Hollywood that everyone would be thrilled with the enhanced protections in Sora 2.0. Yet, reality painted a different scene. 'We began sharing notes with peers in similar talks and discovered our experiences varied wildly,' the agency exec recalled.
The inconsistencies were striking, especially regarding how likenesses and intellectual property were handled. Some representatives were assured that opt-in consent would be mandatory for both categories. Others received conflicting details or no clear guidance on the differences. OpenAI's communications with Hollywood felt erratic and uncoordinated.
Around this period, WME—a powerhouse agency representing celebrities like Matthew McConaughey, Michael B. Jordan, and Ryan Reynolds—was bluntly informed that their stars would need to proactively tell OpenAI not to use their faces and voices on the platform. A WME executive involved in the conversations was appalled. 'Can you imagine an agent phoning a client today to suggest they sign up for Sora?' he shared. 'That client would probably drop the agent on the spot. No one in our line of work would even consider it.' During negotiations, the exec pressed OpenAI: 'Our roster is massive. If everyone opts out, what's the point of this whole venture?'
On September 29, the eve of Sora 2's debut, the WME representative was assured that likenesses wouldn't be utilized without explicit approval. This represented a partial victory for the agencies when OpenAI unveiled its social media app, which lets users generate content incorporating lucrative studio-owned franchises. However, studios had to individually mark properties they wished to exclude—an aggressive step that intensified Silicon Valley's influence over the entertainment sector. And this is the part most people miss: It wasn't just about technology; it exposed how AI tools like Sora could turn beloved characters from shows like SpongeBob SquarePants or games like Grand Theft Auto into user-generated mashups, blurring lines between fan creativity and corporate control.
By October 3, Altman declared a shift toward a quasi-opt-in model. But the damage was done—the strategy had succeeded. Initially, Sora produced videos featuring instantly recognizable movies, TV series, and games, such as Bob's Burgers, Gravity Falls, Pokémon, Red Dead Redemption, and countless more. Sora quickly became the top free app in its category on the App Store.
'A series of highly strategic plays unfolded here,' the agency exec observed. 'They knew precisely what they were doing by launching without safeguards.' Negotiations, now drawing in legal experts, continue, with lawsuits looming.
As OpenAI surges forward, Hollywood is rushing to catch up. The Motion Picture Association, the industry's primary advocacy group that has largely kept quiet amid the AI debates, convened and deemed it essential to publicly criticize the company. Similarly, CAA and UTA joined in, with WME's digital strategy chief Chris Jacquemin distributing a memo to agents, warning OpenAI that none of their clients would partake in Sora 2.
Within studios and agencies, there's widespread bewilderment and irritation over the opt-out process, as described by those in the know. They pointed out the lack of a streamlined system, viewing Altman's reversal as mere rhetoric. Properties must be reported and removed case by case via a link that resembles a complaint tool—slow, tedious, and inefficient. The agency exec noted that OpenAI lacked dedicated staff for Sora's safeguards prior to launch, though a small team exists now. Some Hollywood insiders are now hesitant to engage with OpenAI at all.
They fear that participating in discussions would forever burden them with proving their intellectual property shouldn't be used. In a stern letter to OpenAI at the end of September, Disney asserted it 'is not obligated to opt out' of including its works, to uphold copyright protections.
Earlier this year, Disney, alongside Universal and Warner Bros. Discovery, initiated the first in what may become multiple legal battles against AI firms for their unchecked appropriation of intellectual property, suing Midjourney for enabling user creations with copyrighted characters.
'They're flipping copyright law upside down,' remarked Rob Rosenberg, a partner at Moses Singer and former Showtime Networks executive vice president. 'They're proposing a fake compromise: We can use your stuff unless you say no. And if you don't, it's on you.'
OpenAI's nonchalant attitude toward Hollywood's intellectual property, influenced by tech vets like Shetty and McKean, has persisted: Seek forgiveness rather than permission. This minimizes obstacles for monetizing Sora. ChatGPT thrives with applications ranging from writing assistants to educational tools, earning OpenAI about $1 billion monthly from around 700 million weekly active users, as reported by The Information.
The path for Sora remains less clear. AI video tools rely heavily on producing familiar content—imagine generating a clip that mimics a scene from a blockbuster film to make it relatable and engaging. Consider how Midjourney added protections against copyrighted material post-lawsuit but dropped them when user activity dipped. Altman is amplifying plans to leverage Sora commercially, contingent on studios agreeing to licensing deals.
'In our discussions, many rights holders are enthusiastic about this 'interactive fan fiction' and believe it could add significant value through deeper fan interactions,' Altman posted on his blog.
Shetty aligned with this view: 'We envision fresh avenues for creators to strengthen bonds with their audiences.'
Hollywood faces an exhausting war against a financially robust AI sector, echoing the early internet era's piracy struggles where the industry was slow to adapt. Its strongest card? Potential future collaborations. Yet OpenAI approaches these talks more as a rival than a partner.
'How can you approach the industry as a collaborator?' the WME exec recalled challenging OpenAI. 'You've essentially torched the bridge between us.'
Agencies harbor some bitterness toward studios for not more aggressively countering Silicon Valley's gradual takeover, insiders say. AI firms have trained their models on vast troves of online movies and TV for years. Creators often lack recourse, as most don't own the intellectual property in their work due to 'work for hire' contracts where studios retain rights.
What if studios had sued sooner? Might they have forced AI companies to purge stolen data from their systems, akin to the deal authors struck with Amazon's Anthropic? Currently, studios are obsessed with safeguarding their IP instead of exploring AI partnerships. It's a delicate balance. Some might plan to innovate with the tech, but ongoing lawsuits could complicate that. For instance, Disney could sidestep AI alliances and build its own app—like Sora—where subscribers pay monthly to create interactive content from Disney universes. Others eye partnerships. Here, agency and studio priorities might diverge.
'That's the real dilemma,' the WME exec noted. 'Suing could block future deals with these firms.'
A rival agency executive was harsher: 'Our clients deserve protection. This situation highlights deeper problems.'
What do you think—does OpenAI's 'ask forgiveness' tactic represent smart disruption or unethical opportunism? Is Hollywood right to prioritize lawsuits over partnerships, or should they embrace AI as the next evolution of storytelling? Could this lead to a new era of fan-driven creativity, or destroy the livelihoods of creators? Share your thoughts in the comments below—we'd love to hear your take, whether you agree with the studios' stance or see a counterpoint in OpenAI's approach. This story first ran in the October 15 edition of The Hollywood Reporter magazine. To stay updated, subscribe here.
