CNBC's Julia Boorstin joins 'Squawk on the Street' with the latest details around how OpenAI's new video model Sora, why Hollywood studios are concerned over use of copyrighted material, and much more.

Hollywood

Hollywood studios have voiced strong opposition to OpenAI's recently launched Sora video model, which initially allowed the use of entertainment companies' copyrighted material unless they opted out. Studio executives argue that this approach does not align with copyright law and have met with OpenAI to highlight potential copyright infringements, including both direct and indirect use of protected characters. 

OpenAI CEO Sam Altman has since promised to provide more detailed controls for rights holders and has offered revenue sharing if intellectual property is used. However, many studios remain unsatisfied, preferring to negotiate rather than pursue legal action. The industry is closely monitoring OpenAI's response, especially as previous lawsuits have been filed against other AI companies for similar issues. OpenAI maintains that Sora's policies comply with fair use, but the situation remains complex.

Hollywood backlash grows against OpenAI's new Sora video model

There's growing backlash now from Hollywood Studios after OpenAI introduced its new Sora video model last week and said that the new model would use entertainment company's copyrighted material unless they opted out. Julia Boorstin joins us now with how Hollywood is fighting back against AI. This has been one of the nightmares, Julia, for them. Yeah, such a complex situation here, Sarah. Sources across the movie studios tell me that executives were outraged that OpenAI thought it could ask them to opt out of their intellectual properties inclusion in Sora because that's just not how copyright law works. Now, since then, OpenAI CEO Sam Altman shifted tones, saying he will give rights holders much more granular controls. But we hear studios are trying to figure out how much Sora could violate their copyright. A source tells us that Warner Brothers met with OpenAI to show both blatant copyright infringement along with backdoor prompts that don't explicitly name a protected character. We prompted Sora to, quote, create a superhero that wears a black cape and is saving a woman from a burning building. Got you. Just keep breathing. We're almost out. I thought no one would come. Not on my watch. Hold on tight. Thank you. You're safe now. Got you. Now, it quickly created this video that looks and sounds very similar to Batman. Sora did block many of my queries, including an attempt to create a Garfield-like character. Requests for a fat orange cat eating lasagna violated Sora's guardrails. I got a video of a tabby cat licking a lasagna. So it does seem like changes have been made to the tool since it launched. But sources tell me that the studios are watching right now to see how OpenAI addresses their concerns. They'd much rather prefer to negotiate rather than sue. I'm also hearing that Altman's offer to share revenue with studios if their IP is used doesn't appeal to many media companies who want to control how their characters show up. Now, since Universal Pictures, Disney, and Warner Brothers sued MidJourney and Minimax, we know there is the potential for another lawsuit. One concern an entertainment attorney flagged is that the focus on generative AI outputs, he sees that distracting from the question of whether Sora used copyrighted materials for training data. Now, OpenAI does say that all of the policies put in place around Sora do adhere to fair use, but this is quite a complicated issue, Carl. Key question, Julia. It clearly knew what you meant when you said superhero, and it didn't get that idea from nowhere. Julia Boorstin looking at this new era of video generation.

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