It took 18 months, but the second shoe has finally dropped. After months of watching news outlets, authors, and niche publishers sue AI companies for training models on copyrighted work, two of Hollywood’s biggest players—Disney and Universal—have joined the legal fight, suing AI image generator Midjourney for what they call a “bottomless pit of plagiarism.”

The lawsuit accuses Midjourney of using copyrighted images of iconic characters—from Shrek to Yoda—to train its generative models, which now produce shockingly similar (and legally questionable) facsimiles. Disney’s chief legal officer minced no words: “Piracy is piracy.”

The lawsuit marks a turning point, a line drawn in the sand as studios face an existential question: will they remain creative powerhouses, or fade into data vendors managing yesterday’s IP?

What’s most striking is how late this lawsuit comes in the AI litigation timeline. The New York Times fired the first legal salvo back in 2023 against OpenAI and Microsoft. Then came individual authors. Then came media companies. But the major Hollywood studios, those with the most recognizable and valuable visual IP in the world, held off—until now.

There may be strategy in the delay. In legal terms, Midjourney is among the smaller, less capitalized players in the generative AI field—a softer target for what could become a broader war. As 2025 unfolds, expect more lawsuits to follow, perhaps against better-funded operators like OpenAI, Google Gemini, or Stability AI.

But the bigger picture is clear: Hollywood’s future is on the line.

If the studios lose this fight, it won’t just mean a few unpaid licensing fees. It could fundamentally erode the economic foundation of how content is created. AI tools trained on Hollywood’s archives can already generate new content at unprecedented speed and scale. If that content becomes good enough—and cheap enough—why would the next generation of creators, platforms, or consumers wait for a studio to greenlight anything?

In that world, studios shift from creators to licensors, overseeing the slow monetization of back-catalogs while startups and solo creators, armed with AI, churn out endless variations of what came before. Think TikTok with a Pixar filter. Think Netflix without the cost of production. Think: the end of the studio system as we know it.

Some argue we’re already halfway there. Studio output is dominated by franchise IP, while tech-driven upstarts experiment with format, tone, and speed. But generative AI could make that trend irreversible. Once models are trained on the best of what Hollywood has produced, and once consumers begin accepting AI-made entertainment, what’s left for studios to control?

The stakes are existential. Either studios reclaim their content, and with it their cultural and economic relevance—or they risk becoming the fossil fuel of the media ecosystem: critical to past progress, but slowly phased out by something faster, cheaper, and ultimately more scalable.

Bob Iger may not want to be remembered as the CEO who presided over Disney’s transformation from Dream Factory to IP landlord. But legal advisors may warn him: better a compromised deal than a total loss.

For now, the case sits with a Los Angeles District Court. But the implications reach far beyond legal briefs. They go to the heart of Hollywood’s future: will it be driven by human creativity, or by the very machines trained on it?

Whatever happens, this is no longer a theoretical threat. The studios are in the fight now. And the clock is ticking.