The Walt Disney Company on Thursday announced it will make a $1 billion equity investment in OpenAI and will allow users to make videos with its copyrighted characters on its Sora app.

OpenAI launched Sora in September, and it allows users to create short videos by simply typing in a prompt.

As part of the startup's new three-year licensing agreement with Disney, Sora users will be able make content with more than 200 characters across Disney, Marvel, Pixar and Star Wars starting next year.

"The rapid advancement of artificial intelligence marks an important moment for our industry, and through this collaboration with OpenAI we will thoughtfully and responsibly extend the reach of our storytelling through generative AI, while respecting and protecting creators and their works," Disney CEO Bob Iger said in a statement.

As part of the agreement, Disney said it will receive warrants to purchase additional equity and will become a major OpenAI customer.

Disney is deploying OpenAI's chatbot ChatGPT to its employees and will work with its technology to build new tools and experiences, according to a release.

When Sora launched this fall, the app rocketed to the top of Apple's App Store and generated a storm of controversy as users flooded the platform with videos of popular brands and characters.

The Motion Picture Association said in October that OpenAI needed to take "immediate and decisive action" to prevent copyright infringement on Sora.

OpenAI CEO Sam Altman said more "granular control" over character generation was coming, according to a blog post following the launch.

As AI startups have rapidly changed the way that people can interact with content online, media companies, including Disney, have kicked off a series of fresh legal battles to try and protect their intellectual property.

Disney sent a cease and desist letter to Google late on Wednesday alleging the company infringed its copyrights on a "massive scale." In the letter, which was viewed by CNBC, Disney said Google has been using its copyrighted works to train models and distributing copies of its protected content without authorization.

Universal and Disney have sued the AI image creator Midjourney, alleging that the company improperly used and distributed AI-generated characters from their movies. Disney also sent a cease and desist letter to Character.AI in September, warning the startup to stop using its copyrighted characters without authorization.

Disney's deal with OpenAI suggests the company isn't ruling out AI platforms entirely.

The companies said they have affirmed a commitment to the use of AI that "protects user safety and the rights of creators" and "respects the creative industries," according to the release.

OpenAI has also agreed to maintain "robust controls" to prevent illegal or harmful content from being generated on its platforms.

Some of the characters available through the deal include Mickey Mouse, Ariel, Cinderella, Iron Man and Darth Vader. Disney and OpenAI said the agreement does not include any talent likeness or voices.

Users will also be able to draw from the same intellectual property while using ChatGPT Images, where they can use natural language prompts to create images. 

"Disney is the global gold standard for storytelling, and we're excited to partner to allow Sora and ChatGPT Images to expand the way people create and experience great content," Altman said in a statement.

Curated selections of Sora videos will also be available to watch on Disney's streaming platform Disney+.

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