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Hollywood studios accused of AI hypocrisy amid high-stakes legal battle that could define controversial’s tech’s future

Midjourney is demanding that Disney, Warner Bros., and Universal disclose all internal uses of generative AI, including business plans and training data, in a high-stakes legal battle over copyright infringement. The AI company argues the studios are hypocritical for suing over AI-generated images of characters like Shrek and Darth Vader while using similar AI tools internally. A hearing on the discovery dispute is set for August 17.

read1 min views1 publishedJul 22, 2026
Hollywood studios accused of AI hypocrisy amid high-stakes legal battle that could define controversial’s tech’s future
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Hollywood’s most high profile AI legal war between Midjourney and a trio of Hollywood studios has now reached the Jiu Jitsu phase as lawyers for the AI company are demanding that plaintiffs Disney, Warner Bros and Universal disclose all the ways they already use AI internally.

A Central District of California Court judge had previously ruled that the studios had to hand over information to Midjourney’s lawyers about their generative AI uses only when it showed up in “consumer-facing” videos and images.

Midjourney has argued that it wants all of their AI work, even those done internally, disclosed during the discovery process, including any business plans, research reports, training data and even board presentations about AI.

Last fall, Disney and Universal sued Midjourney, accusing it of IP infringement because its video generator could create images of copyrighted characters like Shrek, Bart Simpson and Darth Vader. A few months later, Warner Bros. joined the lawsuit.

Much of Midjourney’s defense rests on the idea that the studios engage in the same AI practices for which they are suing Midjourney, though legal sources suggest this is a thin argument likely to fail. The company also yesterday filed a motion to throw out some of the claims like “secondary liability,” essentially arguing that it shouldn’t be held responsible for its users’ actions.

Either way, we’ll find out a resolution to this procedural question soon: A hearing is set for August 17.

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