Not everything Disney (DIS 0.12%) touches ends in a happily ever after. The media giant's short-lived partnership with ChatGPT parent OpenAI is over before it had a chance to begin.
OpenAI is shutting down Sora, its controversial and disruptive text-to-video generative AI model. The end of Sora also ends Disney's plan to invest $1 billion in OpenAI. That deal -- signed in December -- would eventually allow Sora users to access some of Disney's iconic characters for its AI output.
No Sora, no deal.
Image source: Disney.
This is the way
Disney could have been a part of what is likely the last round of funding before a potential OpenAI IPO later this year. With OpenAI now valued at $852 billion -- enough to buy five Disneys -- it's probably not a bad thing for the House of Mouse to move on. A couple of OpenAI rivals are gaining momentum, so the ceiling may be limited for today's new investors.
Disney stock can still use a boost, but it might be easier to bet on itself. With so many entertainment businesses to feed, there are plenty of internal targets for Disney to focus on in 2026.
NYSE: DIS
Key Data Points
The lion's share of its investments over the next few years should go to its theme-parks-led experiences segment. Disney has committed $60 billion over 10 years to update its gated attractions and expand its cruise ship fleet. Its theme parks worldwide are getting major new attractions and lands, including Disney World, which is getting several new experiences. Disney has five cruise ships scheduled to launch over the next five years.
Disney will also be making big investments in the content that put it on the map. This year alone, it should have some pretty big movies with Toy Story 5 and Marvel's Avengers: Doomsday. Now that its streaming business is profitable, it's easy to justify big-budget productions for Disney+ and Hulu.
With a 72% stake in ESPN -- after striking a deal recently to give the NFL a 10% position in exchange for some broadcasting properties -- Disney will naturally be putting up more money to secure rights to magnetic content.
There is a chance that Disney will make a sizable acquisition, but that seems unlikely anytime soon. After making defining deals for Pixar, Marvel, Lucasfilm, and Fox over the past 20 years, Disney has stepped away from the bidding table. It was surprisingly absent from the names of potential suitors for the two media giants that agreed to be acquired last year. An opportunity may come up that's too good for Disney to pass up, but -- for now -- look for the media leader to continue prioritizing investment in itself.
