Disney and Universal sue AI startup Midjourney in first-of-its-kind clash

June 12, 2025 02:53 AM AEST | By Investing

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Disney and Universal sue AI startup Midjourney in first-of-its-kind clash — Image source: Kalkine Media

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Investing.com -- Walt Disney Company (NYSE:DIS) and Universal Corporation (NYSE:UVV) have filed the entertainment industry’s first major lawsuit against a generative AI company, accusing image generator Midjourney of large-scale copyright infringement. The studios allege Midjourney built its business by training on their intellectual property and enabling users to produce high-quality images of characters like Darth Vader, Elsa, Shrek, and the Minions... all without permission.

The complaint, filed in California federal court, frames Midjourney’s tool as an "AI-powered vending machine" that dispenses unauthorized copies of famous characters with a simple text prompt. “Piracy is piracy,” the studios argue, emphasizing that generative AI tools should be held to the same copyright standards as traditional content creators.

Midjourney reportedly generated $300 million in revenue last year, capitalizing on growing demand for AI-generated visuals. Disney and Universal claim the company has ignored repeated requests to implement safeguards, while continuing to roll out more advanced versions of its model that improve the quality of potentially infringing content.

The lawsuit arrives at a pivotal moment for the entertainment industry, as studios grapple with the implications of AI on IP, labor, and content value. While visual artists and writers have raised concerns for over a year, this marks the first time a major studio group has taken legal action against a generative AI platform.

The studios also warn that Midjourney’s new AI video service could soon create unauthorized animated clips featuring their characters, compounding the problem. According to the filing, the company has started training its video model, a move the plaintiffs call an extension of the same infringing practices.

The outcome of the case could shape the boundaries of copyright in the age of AI, with potential consequences across gaming, publishing, music, and more. For Hollywood, this lawsuit marks a definitive shift in how the industry plans to protect its creative assets in the face of rapid technological change.

This article first appeared in Investing.com

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