Studios stay on the sidelines as AI battle unfolds

Bloomberg reports that OpenAI has partnered with iPhone maker Apple, giving the company a board seat, giving the Sam Altman-led company a new foothold in Hollywood as the industry grapples with artificial intelligence tools that threaten to upend production and the livelihoods of creators who worry they will be replaced by the technology.

As part of a larger deal announced last month, Apple's head of the App Store, former marketing chief Phil Schiller, will take on a so-called “observer” role, according to Bloomberg. The pact gives Schiller board seats and a glimpse into the company's operations, including lobbying Hollywood to adopt its products, but he will not have a voting right.

The move follows OpenAI's February launch of Sora, an AI tool that can create hyper-realistic videos. By simply responding to a few text prompts, it appears to be able to create videos of complex scenes with multiple characters, different types of shots, and near-exact details of the subject in relation to the background. Beta testers, who are providing OpenAI with feedback to help improve the technology, are developing their own projects using Sora as part of the company's Hollywood offensive.

Apple's growing partnership with OpenAI further calls into question the position of the Motion Picture Association and major studios, whose members include Disney, Warner Bros. Discovery and Netflix, on the issue of using intellectual property to train AI systems. OpenAI has faced a storm of lawsuits from artists, authors, music publishers and most sectors of the creative industry, accusing it of infiltrating the entertainment industry by misappropriating copyrighted material and skyrocketing to a multi-billion dollar valuation.

Asked by CNBC whether AI companies have “effectively stolen the world's intellectual property,” Mustafa Suleiman, head of Microsoft's AI division, said: “Anyone can copy it, reproduce it, duplicate it. It's 'freeware,' so to speak, and that's how it's been understood.”

AI is one of Hollywood's most polarizing topics, with creators taking notice of tech executives' comments suggesting it will be killed off. OpenAI's chief technology officer said in June that the company's tools could eliminate jobs. “Some creative jobs may disappear, but if the content that comes out of them is not of high quality, then maybe those jobs shouldn't have existed in the first place,” she explained.

Movie studios are one of the most prominent groups to choose not to sue AI companies that may use copyrighted material in their training data. AI image generators are increasingly returning near-identical replicas of movie frames. Ask “Thanos: Infinity War” and Midjourney, an AI program that turns text into surreal graphics, returns an image of a purple-skinned villain in a frame that appears to be taken from a Marvel movie or promotional material, barely altered. Ask the tool for a frame from a movie and it similarly produces a shot of Tom Cruise in the cockpit of a fighter jet in “Top Gun: Maverick.”

Some of the newest members of the MPA, such as Apple and Amazon, may create a rift between movie studios, which could license their content catalogs to AI companies, as some publishers have done. These companies are industry leaders in developing and commercializing AI technology.

In response to the Copyright Office's investigation into policy issues surrounding the intersection of AI and intellectual property, the MPA clashed with SAG-AFTRA, the Writers Guild of America, and the Directors Guild of America on several key issues. The MPA, joined by OpenAI, Meta, and technology advocacy groups, disagreed with the unions on whether new laws were needed to address the unauthorized use of copyrighted works to train AI systems and the mass generation of potentially infringing works based on existing content. The unions argued that existing intellectual property law was sufficient to address the thorny legal issues posed by this technology. This was in contrast to SAG-AFTRA, which called for a federal right of publicity law that would protect its members' rights to profit from their image, voice, and likeness.

Earlier this month, the Chamber of Progress, a tech industry coalition whose members include Amazon, Apple, and Meta, launched a campaign to defend the legality of using copyrighted works to train artificial intelligence systems.

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