Disney Bets $1 Billion on AI

Hey Superheroes,

The U.S. Fed delivered its third rate cut of the year this week, dropping rates by 0.25% to a range of 3.5%-3.75%. But the move came with a warning: just one more cut is expected in 2026 and another in 2027. Markets rallied cautiously as investors eye the possibility of a Santa Rally to close out the year.

Meanwhile in Australia, the RBA held rates steady at 3.6% and signalled the next move could be to raise rates when it meets again in February 2026.

Here are this week’s biggest stories.

Disney Goes All In on AI 

Walt Disney (NYSE:DIS) just made one of the boldest bets in Hollywood history, investing US$1 billion in OpenAI and handing over the keys to some of its most iconic characters.

The three-year partnership announced on Thursday allows OpenAI’s Sora video generator and ChatGPT Images to create content using licensed Disney characters including Mickey Mouse, Star Wars heroes, Pixar favourites and the Marvel universe. The deal excludes talent likenesses or voices.

🎥 Hollywood meets generative AI

Disney CEO Bob Iger and OpenAI’s Sam Altman began talking years ago about showcasing the potential of generative AI combined with Disney’s storytelling power. OpenAI gave Disney early access to Sora, and the studio found them willing to engage constructively on concerns around inappropriate content and creator protections.

Starting early next year, users will be able to generate videos featuring Disney characters through Sora and ChatGPT Images. A selection of user-generated videos will stream on Disney+, letting the platform capitalise on growing demand for short-form content.

Disney will also deploy ChatGPT internally to support film production and gain efficiency, while exploring tools that let Disney+ subscribers create and consume user-generated content.

💰 The strategic play 

As part of the agreement, Disney receives warrants to purchase additional OpenAI equity. The media giant will use OpenAI’s models to build new products and customer experiences while accessing AI tools that could transform how it produces content.

The deal includes guardrails to prevent characters being depicted in inappropriate situations. Disney views AI as a way to extend its storytelling reach while protecting creators and their work.

🎬 Controversy brewing 

The partnership arrives months after the Creative Artists Agency criticised OpenAI for exposing artists to “significant risk” through Sora and questioned whether creative professionals would be compensated. Disney and Comcast’s Universal also filed a copyright lawsuit against AI photo firm Midjourney in June over unauthorised use of their characters.

Myer’s Best Black Friday Ever 

Myer (ASX:MYR) posted its strongest Black Friday sales performance on record this week, driving shares up 10% to 45¢ on Thursday as billionaire retailer Solomon Lew confirmed he’ll join the board in April.

The department store chain reported A$1.52 billion in group sales for the first 19 weeks of FY26, up 3%. Myer Retail, the department stores division, grew 3.4% with strong double-digit gains across a number of departments including homewares and women’s wear..

🛍️ The turnaround story

Executive chairwoman Olivia Wirth told shareholders at Thursday’s annual meeting that Myer is entering peak trading season with momentum. The company added 22 new beauty brands and over 1700 new products this year, and is upgrading the beauty hall at its flagship Sydney store on Pitt Street Mall.

After acquiring Premier Investments’ apparel brands earlier this year – including Dotti, Portmans and Just Jeans – Myer’s total store count across Australia and New Zealand rose to 750 sites, including 56 department stores. Sales in the apparel brands gained 1.3% in the first 19 weeks of FY26.

Wirth plans to add 20 additional clothing brands in the second half, featuring Australian labels and international names like Topshop. This follows the return of JAG and Sportscraft plus the introduction of Lioness.

💡 The Lew factor 

Solomon Lew, 80, owns about 30% of Myer and will join the board after the company reports half-year results and finalises the apparel brands acquisition. Lew’s long-time lieutenant Terry McCartney and former Premier Investments director Gary Weiss already hold two board seats.

Angus Aitken of Aitken Mount Capital Partners called Myer “dirt cheap” and praised Wirth’s team for fixing issues inherited from previous management. With A$4 billion in revenue, analysts see significant upside in transforming the department store assets and proving the apparel brands were a smart acquisition.

Despite the positive momentum, Myer shares remain down almost two-thirds over the past year. The stock closed at 45¢ following the sales update.

🔦 Some other things we’re shining the Spotlight on: 

SOCIAL MEDIA BAN TAKES EFFECT: Under-16s in Australia are now banned from major social media platforms including TikTok, X, Facebook, Instagram, YouTube, Snapchat and Threads. The world-first law forces platforms to take “reasonable steps” to keep kids off their sites or face fines up to A$49.5 million for serious breaches. 

WESTPAC OUTAGE HITS THOUSANDS: More than 3,000 Westpac customers reported issues accessing banking services on Wednesday after an outage disrupted EFTPOS terminals and online payments. The bank confirmed merchant systems were operating at reduced performance with intermittent transaction problems. 

LIONTOWN SECURES NEW LITHIUM DEAL: Liontown Resources (ASX:LTR) locked in a new offtake agreement with Chinese battery manufacturer Canmax Technologies, strengthening its position in the global lithium supply chain. The agreement provides Liontown with another outlet for production from its Kathleen Valley lithium project in Western Australia, one of the country’s largest undeveloped hard rock lithium deposits.

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