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The Street
The Street
Ian Krietzberg

Disney and Universal are Facing a Threatening New Problem That Could Cost Millions

It didn't take long for the excitement around generative AI models like ChatGPT to sour. The chatbot hasn't even been around for a year, and already people across just about every sector are concerned about the threats to job security AI automation presents. One expert warned that the technology is poised to bring "more inequality than ever."

Those in the arts are especially impacted by a technology that can seemingly create in their stead. Though AI cannot create original content, rather, it creates synthesized amalgamations of the content it was trained on. 

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This issue is one of the most prominent issues plaguing negotiations between actors, writers and the studios they work for. The studios are interested in exploring AI; the writers and actors alike want simple assurances that they won't do so. 

As the strikes continue, a New York bill was introduced in June that would require "entities receiving the Empire State Film production tax credit be prohibited from using 'synthetic media' in any component of production that would displace any natural person in such production."

Both Disney (DIS) -) and NBCUniversal -- seemingly uninterested in paying writers -- are paying lobbyists to closely watch that specific piece of proposed legislation, according to Bloomberg. Neither company has yet to take an official public position on the legislation. 

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The bill, if made into law, could serve as a model that might be applied to other states and could cost the companies millions of dollars in savings. 

NBCUniversal (CMCSA) -), according to Bloomberg, received $96.7 million in New York state tax credits since 2022; Disney has received nearly $11 million in credits. 

A Disney spokesperson said that the company's latest move is "standard."

"We track, monitor and review any bills introduced that could potentially impact our business, and in compliance with New York State law, we transparently report those information-gathering efforts in our lobbying disclosures," they said.

Disney CEO Bob Iger, who said recently that the writers' demands are unrealistic, said in May that he is "bullish" on AI. 

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