Hollywood Drops The Hammer On AI, Midjourney And Stable Diffusion

The simmering tensions between creative industries and artificial intelligence companies erupted into open legal warfare this week, as Disney and Universal filed a landmark copyright lawsuit against AI image generator Midjourney, while Getty Images’ high-profile case against Stability AI began in London.

On June 12, Disney and Universal filed a 110-page complaint in Los Angeles federal court, accusing Midjourney of “systematic, ongoing, and willful” copyright infringement. The studios allege that Midjourney trained its AI on “countless” copyrighted images, then enabled users to generate unauthorized reproductions of beloved characters like Darth Vader, Shrek, and Homer Simpson with a simple text prompt. The complaint includes side-by-side comparisons of original movie stills and AI-generated images, and language characterizing the image generators as a “bottomless pit of plagiarism.”

Midjourney, which reportedly generated $300 million in revenue last year and boasts over 20 million users, did not comment on the lawsuit. In a previous interview, founder David Holz has described his popular AI model in ways I’m sure he wishes he could take back. “It’s just a big scrape of the internet,” he said. “We weren’t picky.”

“Piracy remains piracy, and the fact that it is perpetrated by an AI company does not diminish its infringement,” said Horacio Gutierrez, Disney’s chief legal and compliance officer, in a statement. “Our world-class intellectual property is built on decades of financial investment, creativity, and innovation, investments that are only viable due to the incentives enshrined in copyright law.” Kim Harris, general counsel for NBCUniversal, echoed the sentiment: “We are initiating this action today to safeguard the hard work of all the artists whose creations entertain and inspire us, as well as to protect the significant investments we make in our content.”

Legal experts say the case will hinge on whether Midjourney’s outputs are “transformative” enough to avoid infringement, and whether scraping content from the internet without consent crosses a legal line. “The similarity is so strong there,” said Dustin Taylor, an IP attorney at Husch Blackwell. “If the courts agree, this could set a precedent that fundamentally changes how AI companies train their models.”

While Stable Diffusion’s influence has waned, Midjourney remains among the most popular image generators. One of the reasons behind its popularity is that it creates ultra realistic cinematic images that look like they are from big movies. There are dozens of other companies that do this, too, including Runway, Ideogram, Freepik, ChatGPT, Grok, and Leonardo (owned by Canva), to name just a few. These lawsuits will have a chilling effect on their use, creating a new hierarchy in Generative AI, with companies like Google’s Veo, which indemnifies its users, as do others like Adobe. Moonvalley’s new AI model, Marey, is trained on fully licensed content. Small shops like Invisible Universe and Toonstar train their own models without external data. Runway has a deal with Lions Gate to do their same thing with their IP.

Across the Atlantic, Getty Images’ lawsuit against Stability AI began in London’s High Court. Getty accuses Stability AI of scraping millions of its copyrighted photos to train Stable Diffusion. Getty CEO Craig Peters told CNBC, “We’re spending millions and millions of dollars in one court case… AI companies are making the argument that paying for access to creative works would ‘kill innovation’ by raising costs, but taking copyrighted work without permission or compensation is really stealing.”

Stability AI has admitted to using some Getty images for training but claims its practices fall under “fair use” and that its models do not reproduce original works directly. “Artists utilizing our tools are creating works that build upon collective human knowledge, which is fundamental to fair use and freedom of expression,” a Stability AI spokesperson said. Getty is bringing a parallel lawsuit against Stability AI in the United States.

Bryn Mooser, head of new, AI-focused Asteria Studios, partnered with Moonvally to create an AI video generator trained exclusively on licensed content, Marey. “There’s no question to me that the studios are right. AI models must have consent,” he said on the AI/XR Podcast last week. Disney and Universal are seeking up to $150,000 per infringed work, but this is not about the money as much as it is defeating the fair use argument, which will set the legal and ethical boundaries for how AI companies use copyrighted material in the years to come.