The Walt Disney Company is officially backing out of its deal with OpenAI.Disney’s use and support of AI has riled more than a few feathers with fans. The company’s decision to utilize AI for everything from theme park announcements to artwork on Main Street, U.S.A. has been met with intense backlash on social media.Credit: PixarRELATED: Disney & Bob Iger Face “Unprecedented Boycott” After Controversial Details EmergeIn 2025, Disney reignited backlash with plans to invest $1 billion in OpenAI. While the company is best known for ChatGPT, it was Sora — its AI video tool — that drew Disney in. Under then-CEO Bob Iger, Disney struck the three-year deal allowing its characters to be used within AI.Fans were told they would be able to interact with Pixar, Marvel, and Star Wars characters via Sora on Disney+, or through OpenAI’s own platforms. Within days, a series of horrifying AI images and videos featuring Disney characters hit the internet.Credit: Mika Baumeister, UnsplashNow, however, Disney’s OpenAI era is dead as the company – which passed over to new CEO Josh D’Amaro earlier this month – has confirmed its exit from the deal.Has Disney Given Up On AI?The move isn’t totally unexpected.News of Disney’s exit correlated with confirmation that OpenAI is shutting down Sora, months after the AI video app launched.“We’re saying goodbye to Sora,” Sora said in a statement on X, formerly Twitter. “To everyone who created with Sora, shared it, and built community around it: thank you. What you made with Sora mattered, and we know this news is disappointing. We’ll share more soon, including timelines for the app and API and details on preserving your work.”We’re saying goodbye to Sora. To everyone who created with Sora, shared it, and built community around it: thank you. What you made with Sora mattered, and we know this news is disappointing.We’ll share more soon, including timelines for the app and API and details on…— Sora (@soraofficialapp) March 24, 2026However, that doesn’t mean The Walt Disney Company is out of the AI game for good. Disney has since shared its own statement, confirming that it retains an open mind to future AI collaborations.“As the nascent AI field advances rapidly, we respect OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere,” a spokesperson said (via The Hollywood Reporter). “We appreciate the constructive collaboration between our teams and what we learned from it, and we will continue to engage with AI platforms to find new ways to meet fans where they are while responsibly embracing new technologies that respect IP and the rights of creators.”Credit: DisneyRELATED: AI Escalates Showdown With Disney, Blocks Prompts Tied to the MouseD’Amaro has made it clear that he’s keen to “embrace technology to unlock new possibilities” in his new role as CEO. In his inaugural message to Disney employees, he highlighted this enthusiasm as one of his three key priorities.“Innovation has always been part of Disney’s DNA,” D’Amaro said (via Deadline). “Used thoughtfully, it can empower our storytellers, strengthen our capabilities, and help us create more immersive, interactive, and personal ways for people to experience Disney.”During the 2026 Annual Shareholders Meeting, D’Amaro also directly commented on Disney’s attitude towards AI, clarifying that he hopes to use it in tandem with human creativity rather than replace it.Credit: Disney Parks Blog“At Disney, creativity is always led by people that will always be the case,” he said. “Our goal with AI is to empower human creativity and not replace it. We want to give artists and filmmakers and designers better tools so that they can focus on what they do best.”According to Business Insider, analysts have highlighted AI as one of the key areas that D’Amaro will need to carefully navigate to win over the next generation of fans and set The Walt Disney Company back on track from a financial perspective.What do you think of Disney’s interest in AI?The post CONFIRMED: Josh D’Amaro’s Disney is Abandoning AI appeared first on Inside the Magic.