Midjourney vs. Hollywood: Inside the Legal War That Could Decide the Future of AI in Film and TV

The entertainment industry has a new kind of civil war playing out, and this time the battle isn’t between rival studios or streaming platforms. It’s between Hollywood’s old guard and the AI companies they accuse of stealing from them. But here’s where the story gets messy: the studios themselves are reportedly using the same AI tools they’re trying to shut down.

AI startup Midjourney is seeking to compel three major Hollywood studios — Disney, Universal, and Warner Bros. — to reveal the full details of their internal generative AI usage during the discovery phase of a high-profile copyright lawsuit. The legal maneuver, first reported by TechCrunch on July 4, has the potential to reshape how AI copyright cases are fought and could expose a level of industry hypocrisy that might make the studios’ legal position significantly harder to defend.

The Lawsuits So Far

Disney and Universal sued Midjourney in June 2025, alleging that the startup’s image-generation models can produce characters they own — Bart Simpson, Darth Vader, characters from Universal’s theme parks and film library. Warner Bros. filed a similar suit in September 2025. The core accusation is straightforward: Midjourney trained its AI on copyrighted material without permission, and the output infringes on the studios’ intellectual property.

Midjourney’s primary defense is that training AI models on copyrighted images is protected under the fair use doctrine — the same argument that has been central to every major AI copyright case since the technology went mainstream. The question of whether fair use covers AI training data is still unresolved at the Supreme Court level, making every case like this a potential precedent-setter.

The Discovery Battle That Could Change Everything

A judge previously ordered the studios to provide information about their generative AI usage, but only when it led to “consumer-facing” videos and images. Midjourney is now challenging that limitation, arguing that it unfairly lets the studios cherry-pick evidence that hurts Midjourney while withholding evidence that helps its defense.

In a new court filing, Midjourney argues that “the documents [the studios] are withholding are precisely those that would reveal whether, behind closed doors, they are doing exactly what they are suing Midjourney for doing.”

What Midjourney wants specifically:

• Full internal GenAI documentation — not just consumer-facing outputs, but internal R&D, storyboarding tools, pre-visualization AI, and any internal models trained on copyrighted content.
• All Midjourney prompts and outputs — not just the ones the studios consider infringing, but the complete set. This would give Midjourney’s legal team a fuller picture of how the studios themselves have engaged with generative AI.

The argument is clever. If Disney has been using generative AI to storyboard its upcoming films — training models on its own copyrighted library — then claiming that training AI on copyrighted content is inherently illegal becomes a much harder argument to make. As Midjourney puts it: if the studios are “developing image-generating AI models for internal use in storyboarding or ideating content for film or TV, that evidence would equally demonstrate that it is an industry custom, even among the studios themselves, to download and train AI on unlicensed copyrighted content.”

The Studios’ Counterargument

The studios’ legal team, led by attorney David Singer, describes Midjourney’s request as a “fishing expedition.” Singer argues that the studios “do not seek to stop AI technology or even shut down Midjourney’s business” — they simply want Midjourney to stop copying their movies and TV shows and distributing derivative works that include copies of their characters without authorization.

It’s a carefully calibrated position. The studios want to avoid looking like they’re anti-technology while still protecting the copyrights that underpin their multi-billion-dollar intellectual property portfolios. But the “fishing expedition” defense is harder to sustain when the discovery request is this narrow and specific. Midjourney isn’t asking for trade secrets; it’s asking for documentation of AI use.

Why This Matters for the Entertainment Industry

This case is unfolding against a backdrop of growing tension between Hollywood and the AI industry. The Writers Guild of America and SAG-AFTRA both secured AI protections in their 2023 contracts after strikes that shut down the industry for months. But those protections address AI use in production — writing scripts, generating performances, replicating likenesses. The question of whether AI companies can train on Hollywood’s back catalog without paying for it is a separate, and potentially more consequential, legal question.

The outcome of this discovery dispute will determine how much “AI hypocrisy” defendants can expose regarding plaintiffs’ own use of copyrighted training data. If Midjourney wins the discovery battle, the studios could be forced to publicly disclose AI practices that they may prefer to keep quiet. If the studios win, the standard of what counts as discoverable AI documentation will be set narrowly, making it harder for future defendants to mount similar arguments.

Disney has been one of the more publicly visible studios when it comes to AI experimentation. They’ve reportedly used AI for visual effects work on several recent Marvel projects and have invested in AI research through Disney Research Studios. Disney Gallery: The Mandalorian offers a behind-the-scenes look at how the studio already uses cutting-edge technology — and that was before the generative AI wave hit full force. The question isn’t whether the studios are using AI; it’s how broadly they’re using it internally.

Warner Bros. and the Industry’s AI Awkwardness

Warner Bros. has its own complicated relationship with AI. The studio has experimented with AI-driven visual effects and has been part of industry discussions about setting standards for AI use in filmmaking. 100 Years of Warner Bros. documents the studio’s long history of technological adaptation — from sound to color to digital — and AI is just the latest chapter in that story.

But here’s the uncomfortable truth for every major studio: the same technology that threatens their copyright model is also the technology that could save them millions in production costs. The incentive to use AI internally is enormous, even as their legal teams argue publicly that it’s theft when others do it.

What Happens Next

The judge in the case will rule on Midjourney’s expanded discovery request in the coming weeks. If granted, the studios would have a fixed period to produce the requested documentation, and the public would get its first comprehensive look at how Hollywood’s biggest players are actually using generative AI behind closed doors.

The larger question — whether training AI on copyrighted data is fair use — will take much longer to resolve. It will likely need to reach the Supreme Court for a definitive answer, and that could take years. In the meantime, every discovery ruling, every filing, and every leaked document shapes the narrative that will eventually guide the justices.

For now, the AI vs. Hollywood legal saga is entering a new and more interesting phase. The studios came after Midjourney swinging, but the startup is proving it can fight back — and it’s dragging the industry’s secrets into the light along the way.

The Brothers Warner offers a fascinating look at how the studio system evolved over a century, while Hollywood Me provides a more modern take on the industry. Both are worth a watch as background context for the AI battle that’s reshaping Hollywood as we speak.